# FORM 10-K UNITED
STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

_________________

|[X] | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                OF
1934 For the fiscal year ended December 31, 2006 OR
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|[   ] | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF
1934 For the Transition period from __ to __
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------

Commission file number
0-18110

Gehl Company(Exact name of
registrant as specified in its charter)

|Wisconsin                                                      | 39-0300430                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|143 Water Street, West Bend, WI                                | 53095                               
|(Address of principal executive office)                        | (Zip Code)                          

Registrants
telephone number, including area code (262) 334-9461

Securities registered
pursuant to Section 12(b) of the Act:

Common Stock, $.10
par value(Title of class)

Rights to Purchase Preferred
Shares(Title of class)

Securities registered
pursuant to Section 12(g) of the Act:  NONE

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act.

| | Yes
    No X
| | ------------

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act.

| | Yes
    No X
| | ------------

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

| | Yes
X           No
| | ------------------

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K [ X ]

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer or
a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act. (check one): Large accelerated
filer     Accelerated filer X    Non-accelerated filer

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

| | Yes
    No X
| | ------------

Aggregate
market value of voting and non-voting common equity held by non-affiliates of the
registrant: $287,220,461 at February 7, 2007.

Number
of shares outstanding of each of the registrants classes of common stock, as of
February 7, 2007:

|Class                        | Shares Outstanding
|---------------------------- | ------------------
|Common Stock, $.10 Par Value | 12,197,037        

DOCUMENTS INCORPORATED
BY REFERENCE  Gehl Company Proxy Statement for the 2007 Annual Meeting of Shareholders
(to be filed with the Commission under Regulation 14A within 120 days after the end of
the registrants fiscal year end and, upon such filing, to be incorporated by
reference into Part III)

---

# GEHL COMPANY

_________________

# INDEX TO ANNUAL REPORT
ON FORM 10-K For The Year Ended December 31, 2006

|Part I   |                                                                    | Page
|-------- | ------------------------------------------------------------------ | ----
|Item 1   | Business                                                           | 1   
|Item 1A  | Risk Factors                                                       | 8   
|Item 1B  | Unresolved Staff Comments                                          | 10  
|Item 2   | Properties                                                         | 11  
|Item 3   | Legal Proceedings                                                  | 11  
|Item 4   | Submission of Matters to a Vote of Security Holders                | 12  
|         | Executive Officers of the Registrant                               | 12  
|Part II 
|Item 5   | Market for Registrants Common Equity, Related Shareholder        
|         | Matters and Issuer Purchases of Equity Securities                  | 14  
|Item 6   | Selected Financial Data                                            | 16  
|Item 7   | Managements Discussion and Analysis of Financial                 
|         | Condition and Results of Operations                                | 17  
|Item 7A  | Quantitative and Qualitative Disclosures About Market Risk         | 28  
|Item 8   | Financial Statements and Supplementary Data                        | 29  
|Item 9   | Changes in and Disagreements with Accountants                     
|         | on Accounting and Financial Disclosure                             | 63  
|Item 9A  | Controls and Procedures                                            | 63  
|Item 9B  | Other Information                                                  | 63  
|Part III
|Item 10  | Directors and Executive Officers of the Registrant                 | 63  
|Item 11  | Executive Compensation                                             | 64  
|Item 12  | Security Ownership of Certain Beneficial Owners and Management and
|         | Related Shareholder Matters                                        | 64  
|Item 13  | Certain Relationships and Related Transactions                     | 64  
|Item 14  | Principal Accountant Fees and Services                             | 64  
|Part IV 
|Item 15  | Exhibits and Financial Statement Schedules                         | 65  
|         | Signatures                                                         | 65  

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PART I

# Special Note Regarding
Forward-Looking Statements

Gehl
Company (the Company or Gehl) intends that certain matters
discussed in the Annual Report on Form 10-K are forward-looking statements
intended to qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. All statements other than statements of
historical fact are forward-looking statements. When used in this filing, words such as
the Company believes, anticipates, expects,
estimates or projects or words of similar meaning are generally
intended to identify forward-looking statements. These forward-looking statements are not
guarantees of future performance and are subject to certain risks, uncertainties,
assumptions and other factors, some of which are beyond the Companys control, that
could cause actual results to differ materially from those anticipated as of the date of
this filing. Factors that could cause such a variance include, but are not limited to,
those risk factors cited in Part I, Item 1A of this filing, any adverse change in general
economic conditions, unanticipated changes in capital market conditions, the
Companys ability to implement successfully its strategic initiatives (including cost
reduction initiatives), market acceptance of newly introduced products, unexpected issues
related to the pricing and availability of raw materials (including steel) and component
parts, unanticipated difficulties in securing product from third party manufacturing
sources, the ability of the Company to increase its prices to reflect higher prices for
raw materials and component parts, the cyclical nature of the Companys business, the
Companys and its customers access to credit, competitive pricing, product
initiatives and other actions taken by competitors, disruptions in production capacity,
excess inventory levels, the effect of changes in laws and regulations (including
government subsidies and international trade regulations), technological difficulties,
changes in currency exchange rates or interest rates, the Companys ability to secure
sources of liquidity necessary to fund its operations, changes in environmental laws, the
impact of any strategic transactions effected by the Company, and employee and labor
relations. Shareholders, potential investors, and other readers are urged to consider
these factors in evaluating the forward-looking statements and are cautioned not to place
undue reliance on such forward-looking statements. The forward-looking statements included
in this filing are only made as of the date of this filing, and the Company undertakes
no obligation to publicly update such forward-looking statements to reflect subsequent
events or circumstances. In addition, the Companys expectations for the future,
including those listed in the 2007 Outlook, are based in part
on certain assumptions made by the Company, including those relating to commodities
prices, which are strongly affected by weather and other factors and can fluctuate
significantly, housing starts and other construction activities, which are sensitive to,
among other things, interest rates and government spending, and the performance of the
U.S. economy generally. The accuracy of these or other assumptions could have a material
effect on the Companys ability to achieve its expectations.

# Item 1. Business

# Overview

The
Company is a leader in the design, manufacture and distribution of compact equipment for
construction and agriculture applications. Its compact equipment and related attachments
are primarily used in a variety of earthmoving and material handling applications where
space, mobility and manpower are at a premium. The Company also provides financing for its
dealers and their customers. The Company believes its products are recognized as providing
quality, reliability and performance to a loyal and growing customer base. It also
believes it is differentiated from other construction equipment manufacturers by its focus
on the growing compact equipment market, its extensive compact equipment-focused
distribution network, and its ability to offer a broad line of high-quality compact
equipment to a wide variety of customers. The Company was founded in 1859 and was
incorporated in the State of Wisconsin in 1890.

The
Company believes that it has one of the most extensive compact equipment-focused product
offerings in North America. Its compact equipment consists of skid loaders, telescopic
handlers, compact excavators, compact track loaders, all-wheel-steer loaders, mini-loaders
and asphalt pavers. The Company also provides an assortment of related attachments,
including pallet forks, augers and backhoes, primarily for skid loaders. While the Company
manufactures a majority of the products it sells, it has also proactively established
strategic alliances with select European and Asian compact equipment manufacturers to
distribute their products under its brand names. These alliances further broaden the
Companys product offering and leverage its distribution network.

1

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The
Company markets its products under the Gehl, Mustang and Edge brand names through its
network of independent dealers located primarily in North America and Europe. The
Companys dealers, which number in excess of 650 in North America along with
approximately 115 distributors in the rest of the world, sell its compact equipment and
attachments to contractors, sub-contractors, owner operators, rental stores, farmers,
landscapers and municipalities. Many of these dealers also operate their own rental
fleets. Over time, the Company has cultivated and built what it considers to be one of the
largest independent compact equipment distribution networks in North America. Most of the
Companys largest competitors require their dealers to carry their full line of large
and small equipment which may not be ideally suited for that dealers local market
and customer base. The Company attempts to differentiate itself by offering dealers a
comprehensive compact equipment offering and allowing them to carry only the products
which optimize their overall product portfolio for their individually served markets. It
also supports its dealer network by providing floor plan, retail and rental fleet
financing. It believes the combination of its product offering and financing support
provides a significant opportunity to continue to expand sales to existing dealers and
attract additional dealers in new territories.

The
Company manufactures its products at two facilities located in Yankton and Madison, South
Dakota, and it has selling and distribution facilities in Illinois, Minnesota, Wisconsin
and Germany. Also, under a license agreement with Manitou BF S.A., the worlds
largest manufacturer of telescopic handlers, the Company has the rights to manufacture and
distribute select models of Manitou telescopic handlers under the Gehl brand name for sale
in the United States.

# Discontinued Operations

In
March 2006, the Company decided to discontinue the manufacturing and distribution of its
agricultural implement products. The agricultural implement business included one
manufacturing facility and related manufacturing machinery and equipment. The reduction in
headcount totaled 140 employees, which included both manufacturing and administrative
positions related to the agricultural implement business. As a result of this action, the
Consolidated Financial Statements and related notes have been restated to present the
results of the agricultural implement product line as discontinued operations.

The
discontinuation of the agricultural implement product line resulted in an after-tax charge
to the Companys earnings for the year ended December 31, 2006 of $7.8 million, or
$0.63 per diluted share. The after-tax charge reflects a reduction from the second quarter
2006 estimate of $9.0 million, or $0.73 per diluted share, due to higher than expected
proceeds from the sale of machinery and equipment associated with the discontinued
operations. The after-tax charge is comprised of non-cash asset impairment charges of $5.9
million related to agricultural implement field and factory inventory and certain
property, plant and equipment, and cash charges related to severance and other employee
termination costs of $1.9 million.

The
Company has reflected the results of its agricultural implements product line as
discontinued operations in the Consolidated Statements of Income and prior periods have
been restated. Summary results of operations for the agricultural implements product line
were as follows (in thousands):

|                                                   | Years ended December 31,
|-------------------------------------------------- | ------------------------
|2005                                               | 2004                    
|Net sales                                          |                         
|Pretax loss from discontinued operations           |                         
|Pretax loss on disposal of discontinued operations |                         
|Income tax benefit                                 |                         
|                                                  
|Loss from discontinued operations                  |                         
|                                                  

2

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The assets of the agricultural
implements product line are reflected as net assets of discontinued operations in the
Consolidated Balance Sheets and were as follows (in thousands):

|2006                                  
|--------------------------------------
|Accounts receivable, net              
|Inventories                           
|Property, plant, and equipment, net   
|                                      
|Assets of discontinued operations, net
|                                      

# Business Segments

Statement
of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, establishes the standards for
reporting information about operating segments in financial statements.  Historically
the Company had two operating and reportable segments, construction equipment and
agricultural equipment.  The products in the historical agricultural equipment
segment included material handling equipment (skid loaders, telescopic handlers, compact
excavators, compact track loaders and all-wheel-loaders) and agricultural implement
products for haymaking, forage harvesting, feedmaking and manure handling.  In the
first quarter of 2006, the Company re-evaluated its operating and reportable segments in
connection with the discontinuation of the manufacturing and distribution of its
agricultural implement product line and determined that it now has only one operating and
reportable segment.  Sales of material handling equipment that were previously
included in the agricultural equipment segment and sales that were previously included in
the construction equipment segment are now combined for both internal and external
reporting purposes.

# Sale of Common Stock and
Stock Split

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares in the offering, after deducting underwriting discounts, commissions
and expenses. The Company used the net proceeds it received from the offering to repay
debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

# Products

The
Company markets the following products through its North American dealer and international
distribution network:

| |  | Skid
Loaders  The Companys skid loader line consists of a broad range of products
offered through the Gehl and Mustang brands, including a model with the largest lift
capacity and highest lift height in the industry. The skid loader line features a choice
of hand-operated T-bar or joystick controls, hand only or hand and foot controls. The
skid loader, with its fixed-wheel four-wheel drive is used for a variety of purposes,
including earth moving and material handling duties. The skid loader may also be used
with a variety of attachments.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

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| |  | Telescopic
Handlers  The Companys telescopic handler line consists of a broad range of
products offered through the Gehl and Mustang brands. These telescopic handlers are
designed to handle heavy loads (up to 12,000 pounds) reaching horizontally and vertically
(up to 55 ft.) for use by a variety of customers, including farmers, masons, roofers and
building contractors.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Compact
Excavators  The Companys compact excavator line consists of a broad range of
products offered through the Gehl and Mustang brands. The units range in size from 1.5
metric tons to 11.5 metric tons. All units come standard with auxiliary hydraulics. An
industry exclusive frame leveling system is offered on a number of models. These units
can be equipped with a wide variety of attachments.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Compact
Track Loaders  The Company offers multiple compact track loaders through the Gehl
and Mustang brands. With a dedicated rubber track, these machines are especially useful
in soft or muddy conditions. They offer low ground pressure and high floatation and are
used in landscaping, nursery and general construction applications.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | All-wheel-steer
Loaders  The Company offers multiple all-wheel-steer loaders through the Gehl and
Mustang brands with either conventional or telescopic booms. The units range from 39
horsepower to 75 horsepower and are used in general construction and by building
contractors and material producers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Asphalt
Pavers  Two models of Power Box pavers are marketed by Gehl. These pavers allow
variable paving widths from 4 1/2 to 13 feet and are used for both commercial and
municipal jobs such as county and municipal road, sidewalk, golf cart path, jogging and
bike trail, parking lot, driveway, trailer court and tennis court paving.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Mini-loaders
 Gehl offers an articulated unit, powered by a 20 horsepower engine. It is one of
the few mini-loaders offered in the industry where the operator is seated on the unit.
Offered with a wide variety of attachments, the principal applications for this product
are landscaping, nursery and material handling.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Through
its wholly-owned subsidiary, Compact Equipment Attachments Inc., the Company distributes a
wide variety of attachments primarily for use with skid loaders and compact excavators.
These attachments include dirt, snow and cement buckets, pallet forks and
hydraulically-operated devices such as cold planers, backhoes, brooms, trenchers, snow
blowers, industrial grapples, tree diggers, concrete breakers, augers and many others.

# Marketing and
Distribution

The
Company markets its compact equipment in North America through approximately 650
independent dealers and internationally through approximately 115 distributors. The
Company markets its attachments through its dealer network as well as through non-Gehl or
Mustang dealers, catalogs and its Compact Equipment Attachments Inc. website. The top ten
dealers and distributors of compact equipment accounted for approximately 26% of the
Companys consolidated net sales for the year ended December 31, 2006; however, no
single dealer or distributor accounted for 10% or more of the Companys consolidated
net sales for that period. Sales of the skid loader product line accounted for
approximately 36%, 36% and 37% of the Companys consolidated net sales in 2006, 2005
and 2004, respectively. Sales of the telescopic handler product line accounted for
approximately 33%, 26% and 20% of the Companys consolidated net sales in 2006, 2005
and 2004, respectively.

The
Company believes that maintenance and expansion of its dealer network is important to its
ongoing success in the compact equipment market. Various forms of support are provided for
its equipment dealers, including sales and service training, and, in the United States and
Canada, floor plan financing for its dealers and retail financing for both its dealers and
their customers. The equipment dealers in North America are also supported by district
sales managers who provide a variety of services, including training, market evaluation,
business planning, equipment demonstrations and sales, and regional field service
representatives who assist in training and provide routine dealer service support
functions, including warranty and service assistance. The Company has a service agreement
with a vendor for a centralized parts distribution center located in Belvidere, Illinois.

4

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# Industry and Competition

The
Company operates principally in the global compact equipment industry. Its equipment is
primarily used for earth moving, material handling and paving applications, particularly
in projects where space, mobility and manpower are at a premium. Sales in this market are
driven by activity in the residential, commercial and industrial construction, recycling
and paving industries. The market for compact equipment is particularly dependent on the
level of light construction and repair projects such as residential and light commercial
building, landscaping and recycling. Job mechanization continues to drive demand in the
compact market as construction providers look to replace costly manual labor with compact,
affordable, multi-purpose machines.

The
Company primarily focuses on seven compact equipment product categories: skid loaders,
telescopic handlers, compact excavators, compact track loaders, all-wheel-steer loaders,
asphalt pavers and mini-loaders. It also provides an assortment of related attachments,
including pallet forks, augers and backhoes, primarily for skid loaders. The Company
competes with numerous companies in each of its served markets, primarily based on price,
quality, service and distribution. Its compact equipment product lines face competition in
all of the Companys markets. In general, each line competes with a small group of
seven to twelve different companies, some of which are larger than the Company.

The
primary markets for the Companys compact equipment outside of North America are in
Europe, Australia, Latin America, the Middle East and the Pacific Rim. The Company
believes it is a significant competitor in the skid loader market in most of these
markets.

# Backlog

The
backlog of unfilled equipment orders (which orders are subject to cancellation in certain
circumstances) as of December 31, 2006 was $54.4 million versus $186.3 million at December
31, 2005. Virtually all orders in the backlog at December 31, 2006 are expected to be
shipped in 2007. The decrease in the backlog is primarily due to a change in the order
writing program from 2005 when the program ended in December versus 2006 when the program
was extended into January of 2007. In addition, the available industry manufacturing
capacity and available inventory in the market at December 31, 2006 resulted in fewer
orders due to a decrease in lead times.

# Floor Plan and Retail
Financing

Floor Plan Financing

The
Company, as is typical in its industries, generally provides floor plan financing for its
dealers. Products shipped to dealers under the Companys floor plan financing program
are recorded by the Company as sales and the dealers obligations to the Company are
reflected as accounts receivable.

The
Company provides interest-free floor plan financing to its dealers for equipment for
varying periods of time generally up to six months. Dealers who sell products utilizing
floor plan financing are required to make immediate payment for those products to the
Company upon sale or delivery to the retail customer. At the end of the interest-free
period, if the equipment remains unsold to retail customers, the Company generally charges
interest to the dealer at approximately 3% above the prime rate or, on occasion, provides
an interest-free extension of up to three months upon payment by the dealer of a
curtailment of 25% of the original invoice price to the dealer. This type of floor plan
equipment financing accounts for approximately 74% of the Companys dealer accounts
receivable, with all such floor planned receivables required to be secured by a first
priority security interest in the equipment sold.

Retail Financing

The
Company also provides retail financing primarily to facilitate the sale of equipment to
end users. Additionally, a number of dealers purchase equipment which is held for rental
to the public. The Company also provides rental fleet financing to such dealers in
connection with these purchases. Retail financing in the United States is provided by the
Company primarily through Gehl Finance, the Companys finance division. Retail
financing is provided in Canada by a third party at rates subsidized by the Company.

5

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The
Company maintains arrangements with third parties pursuant to which the Company sells
retail and rental fleet finance contracts through an asset securitization program and
limited recourse arrangements. The finance contracts require periodic installments of
principal and interest over periods of up to 66 months; interest rates are based on market
conditions. The majority of these contracts have maturities of 12 to 60 months. The
Company continues to service the finance contracts it sells, including cash collections.
For additional discussion, see Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Capital Resources
 Off-Balance Sheet Arrangements  Sales of Finance Contracts Receivable,
included in Part II, Item 7 of this Form 10-K and Note 5 of Notes to Consolidated
Financial Statements, included in Part II, Item 8 of this Form 10-K.

# Employees

As
of December 31, 2006, the Company had 855 employees, of which 500 were hourly employees
and 355 were salaried employees. Related to the discontinued operations at the West Bend,
Wisconsin facility, two remaining employees are covered by a collective bargaining
agreement with the United Steelworkers Union (formerly the United Paperworkers
International Union and formerly P.A.C.E) which expired on December 15, 2006. None of the
Companys other employees are represented by unions. There have been no labor-related
work stoppages at the Companys facilities during the past thirty-three years.

# Manufacturing and
Sourcing

The
Company manufactures its products at two efficient and flexible manufacturing facilities
located in South Dakota. In 2002, the Company successfully completed a plant
rationalization that consolidated its manufacturing facilities from five locations into
three and improved its operating margins significantly and in April 2006, the Company
discontinued the manufacturing and distribution of agricultural implements at its facility
in West Bend, Wisconsin. In 2006, the Company began a second expansion of its Yankton,
South Dakota facility that will increase its manufacturing space by 28,100 square feet in
addition to the expansion completed in 2005 that increased the facilitys size by
53,200 square feet. The Company has further enhanced its manufacturing capabilities
through significant investments in painting systems, as well as laser cutting, robotic
welding and other metal forming technologies. The Company believes its ongoing investment
in operational efficiency enhances its competitive cost position and operating margins.

The
Company has established key strategic relationships with leading compact equipment
manufacturers to market their products through the Companys distribution network
under the Gehl and Mustang brands. In July 2004, the Company announced a strategic
alliance with the French company Manitou BF S.A. to manufacture and distribute select
models of its market-leading compact telescopic handlers in the United States. In 1999,
the Company entered into a distribution arrangement covering North and South America with
Neuson Kramer Baumaschinen AG, an Austrian and German manufacturer of compact excavators
and all-wheel-steer loaders. The Company also has a strategic alliance with Takeuchi Mfg.
Co., Ltd. based in Japan to distribute compact track loaders in North and South America.
In addition, most of the products in the Companys wide assortment of attachments are
sourced from other leading manufacturers. The Company has actively expanded its attachment
offering in response to the growing demand for product versatility. The Company
periodically assesses its sourcing relationships and believes these relationships allow
the Company to capitalize on its partners expertise to provide a broad offering of
top-quality compact equipment and attachments.

# Research and Development

The
Company attempts to maintain and strengthen its market position through internal new
product development and incremental improvements to existing products. The Companys
research and development is devoted to developing new products that meet specific customer
needs and to devising incremental improvements to existing products. Research and
development performed by the Company includes the designing and testing of new and
improved products as well as the fabrication of prototypes. The Company expended
approximately $2.8 million, $2.6 million and $2.5 million on research and development for
the years ended December 31, 2006, 2005 and 2004, respectively.

6

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# Patents and Trademarks

The
Company possesses rights under a number of domestic and foreign patents and trademarks
relating to its products and business. While the Company considers the patents, trademarks
and service marks important in the operation of its business, including Gehl®, Gehl
Finance®, Mustang®, ADVANTAGE, Dynalift®, EDGE®, Hydraloc,
Powerview®, Power Protection Plan® and Select-A-Boom, the business of the Company is not
dependent, in any material respect, on any single patent or trademark or group of patents
or trademarks.

# Available Information

The
Companys filings with the Securities and Exchange Commission (SEC),
including annual reports on Form 10-K, quarterly reports on Form 10-Q, definitive proxy
statements on Schedule 14A, current reports on Form 8-K, and any amendments to those
reports filed pursuant to Section 13 or 15(d) of the Exchange Act, are made available free
of charge through the Corporate Governance section of the Companys Internet website
at www.gehl.com as soon as reasonably practicable after the Company electronically
files such material with, or furnishes it to, the SEC. Copies of any materials the Company
files with the SEC can also be obtained free of charge through the SECs website at
www.sec.gov, at the SEC s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549, or by calling the SEC s Public Reference Room at 1-800-732-0330. The Company
also makes available, free of charge, its Ethics Policy, Corporate Governance Guidelines,
committee charters and other information related to the Company on the Companys
Internet website or in printed form upon request.

7

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# Item 1A. Risk Factors

You
should carefully consider each of the risks described below, together with all of the
other information contained in this Annual Report on Form 10-K, before making an
investment decision with respect to our securities. If any of the following risks develop
into actual events, our business, financial condition or results from operations could be
materially and adversely affected and you may lose all or part of your investment.

# We operate in cyclical
industries, which could adversely affect our growth and results of operations.

Our
business depends upon general activity levels in the construction and agricultural
industries. Historically, these industries have been cyclical. As a result, our operating
profits are susceptible to a number of industry-specific factors, including:

| |  | prevailing
levels of construction, especially housing starts, and levels of industrial production;
| | - | --------------------------------------------------------------------------------------------------

| |  | public
spending on infrastructure;
| | - | ----------------------------------

| |  | market
interest rates;
| | - | ----------------------

| |  | volatility
of sales to rental companies;
| | - | ----------------------------------------

| |  | real
estate values;
| | - | -------------------

| |  | consumer
confidence;
| | - | --------------------

| |  | changes
in farm income and farmland value;
| | - | ------------------------------------------

| |  | the
level of worldwide farm output and demand for farm products;
| | - | ----------------------------------------------------------------

| |  | commodity
prices;
| | - | -----------------

| |  | energy
prices;
| | - | --------------

| |  | government
agricultural policies and subsidies;
| | - | -----------------------------------------------

| |  | animal
diseases and crop pests; and
| | - | -----------------------------------

| |  | weather.
| | - | --------

As
a result of these and other factors, including related effects on us and our
customers access to and cost of credit and dealer inventory management, a downturn
in demand for our products can occur suddenly, resulting in excess inventories,
under-utilized production capacity and reduced sales prices for our products. These
downturns may be prolonged and may result in lower net sales and earnings. Equipment
manufacturers, including us, have responded to downturns in the past by reducing
production and discounting product prices. These actions have resulted in restructuring
charges and lower earnings for us in past affected periods. In the event of future
downturns, we may take similar actions.

# Our dependence on, and
the price and availability of, raw materials and component parts may adversely affect our
profits.

We
are exposed to fluctuations in market prices for commodities, such as steel and rubber, as
well as component parts, including engines. In recent years, the prices of various raw
materials and component parts have increased significantly, and we have been unable to
avoid exposure to global price fluctuations and supply limitations, such as occurred in
2005 and 2006 with the cost and availability of steel and related products. In addition,
our products are designed to work with particular components. As a result, our products,
in certain cases, rely on a single source of supply for certain components. If we are
unable to purchase the raw materials and components we require or are unable to pass on
price increases to our customers, our future profitability may be adversely affected.

8

---

# The construction and
agricultural industries in which we operate are competitive, and competitors offerings
of new products or services or lower prices could result in a decrease in our net sales
and earnings.

We
compete with global full-line suppliers (including Caterpillar Inc., Deere & Company,
Case Construction Equipment and Komatsu Ltd.) with a presence in every market and a broad
range of products as well as with product line specialists (including Oshkosk Truck Corp.
(JLG), Ingersoll-Rand Company (Bobcat) and Takeuchi Mfg. Co. Ltd.). Some of our
competitors are larger than us and have greater financial, manufacturing, marketing and
distribution resources. Competitive pricing, product initiatives and other actions taken
by our competitors could cause us to lose customers or force us to decrease our sales
prices, resulting in lower net sales and earnings.

# We source some of our
products from third parties and any interruption in the supply of these products could
adversely affect our net sales and profitability.

We
source compact excavators, all-wheel-steer loaders and compact track loaders from
third-party foreign suppliers. Any interruption in the supply of these products or any
material increase in prices could adversely affect our net sales and profitability. We are
exposed to foreign currency risk with respect to the prices of these products. Any
material change in the value of the United States dollar versus other currencies could
adversely impact our net sales and profitability.

# Our success depends in
part on the introduction of new products, and the failure to introduce new products on a
timely basis could adversely affect our net sales and profitability.

Our
long-term results depend upon our ability to secure, introduce and market new products
successfully. Our success in this area will depend on a number of factors, including our
ability to develop new products internally or source new products from third-party
suppliers, product quality, competition, customer acceptance of new products and the
strength of our dealer networks. Any difficulties in developing or identifying and
sourcing new products, any manufacturing delays or problems with new product launches, or
any increased warranty costs from new products could adversely affect our operating
results. The introduction of new products could also result in a decrease in revenues from
our existing products. The internal development and refinement of products also consumes a
substantial amount of capital. We may need more capital for product development and
refinement than is available to us, which could adversely affect our net sales and
profitability.

# Cyclical and structural
declines in the demand for products we offer may cause us to undertake product line and
facility rationalization initiatives that could result in restructuring charges and lower
net sales and earnings.

The
construction and agricultural industries are continually evolving and undergoing cyclical
and structural changes that impact the demand for the products we offer. We have
historically reviewed these cyclical and structural changes in demand and have taken
action to rationalize our product offerings and production facilities in light of market
conditions. We expect to continue these reviews and to take appropriate action based on
future conditions. Those actions could result in restructuring charges and lower net sales
and earnings.

During
March 2006, we decided to discontinue the manufacturing and distribution of our
agricultural implement products. As a result, we have recorded a $5.9 million after-tax
non-cash impairment charge related to agricultural implement field and factory inventory
and certain property, plant and equipment and a $1.9 million after-tax cash charge related
to severance and other termination costs. See Part II, Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations 
Discontinued Operations. If we incur additional unanticipated expenses associated
with the discontinuation of our implement product line, then our net income could be
adversely affected in future periods.

9

---

# Our leverage could
adversely affect our financial health and make us vulnerable to adverse economic and
industry conditions.

At
times, we may incur indebtedness that is substantial relative to our shareholders
equity. Our indebtedness has important consequences. For example, it could:

| |  | make
it difficult for us to fulfill our obligations under our credit agreement;
| | - | -------------------------------------------------------------------------------

| |  | make
it more challenging for us to obtain additional financing to fund our business strategy,
debt service requirements, capital expenditures and working capital;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | increase
our vulnerability to interest rate changes and general adverse economic and industry
conditions;
| | - | ---------------------------------------------------------------------------------------------------------

| |  | require
us to dedicate a substantial portion of our cash flow from operations to service
indebtedness, thereby reducing the availability of cash flow to fund working capital,
capital expenditures, research and development efforts and other general corporate
activities;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | limit
our flexibility in planning for, or reacting to, changes in our business and markets; and
| | - | -----------------------------------------------------------------------------------------------

| |  | place
us at a competitive disadvantage relative to our competitors that have less debt.
| | - | ---------------------------------------------------------------------------------------

In
addition, our credit facility requires us to maintain specified financial ratios and
satisfy certain financial condition tests, which may require that we take action to reduce
our debt or to act in a manner contrary to our long-term business objectives.

# We are subject to risks
and associated changes in the business climate that could limit our access to capital.

Our
business is capital intensive and the fulfillment of our strategic plan depends, at least
in part, upon our ability to access capital at attractive rates and terms. If access to
capital becomes significantly constrained because of changes in the business climate or
other factors, then our results of operations and financial condition could be
significantly adversely affected.

# We are subject to
significant environmental, health and safety laws and regulations and related compliance
expenditures and   liabilities.

We
are subject to various laws and regulations relating to the protection of the environment
and human health and safety and have incurred and will continue to incur capital and other
expenditures to comply with these regulations. If we fail to comply with any environmental
regulations, then we could be subject to future liabilities, fines or penalties or the
suspension of production at our manufacturing facilities. If unexpected obligations at
these or other sites or more stringent environmental laws are imposed in the future, our
future profitability may be adversely affected.

# Item 1B. Unresolved
Staff Comments

The
Company has no unresolved staff comments to report pursuant to Item 1B.

10

---

# Item 2. Properties

The following
table sets forth certain information as of December 31, 2006, related to the
Companys manufacturing facilities. See Managements Discussion and
Analysis of Financial Condition and Results of Operations- Liquidity and Capital
Resources- Capital Expenditures, included in Part II, Item 7 of this Form 10-K.

|             
|-------------
|West Bend, WI
|             
|             
|             
|             
|             
|             
|Madison, SD  
|             
|             
|Yankton, SD  
|             

The
Company also has a 32 month renewable service agreement with a vendor for a centralized
parts distribution center located in Belvidere, Illinois, as well as a 60 month operating
lease for a warehouse and distribution facility in Madison, South Dakota. In addition, the
Company has operating leases for sales offices in Minnesota and Wisconsin and for a sales
and distribution facility in Germany.

# Item 3. Legal Proceedings

The
Company is a defendant from time to time in actions for product liability and other
matters arising out of its ordinary business operations. The Company believes that the
actions presently pending will not have a material adverse effect on its consolidated
financial position or results of operations. To the Companys knowledge, there are no
material legal proceedings to which any director, officer, affiliate or more than 5%
shareholder of the Company (or any associate of the foregoing persons) is a party adverse
to the Company or any of its subsidiaries or has a material interest adverse to the
Company or its subsidiaries.

11

---

# Item 4. Submission of
Matters to a Vote of Security Holders

No
matters were submitted to a vote of security holders during the quarter ended December 31,
2006.

# Executive Officers of
the Registrant

Set
forth below is certain information concerning the executive officers of the Company as of
February 1, 2007:

|                                           |                                                                        
|------------------------------------------ | -----------------------------------------------------------------------
|Name, Age and Position                     | Business Experience                                                    
|William D. Gehl, 60,                       | Mr. Gehl has served as Chairman of the Board of Directors of the       
|Chairman of the Board of  Directors and    | Company since April, 1996 and as Chief Executive Officer of the Company
|Chief Executive Officer                    | since November, 1992. Mr. Gehl served as President of the Company from 
|                                           | November, 1992 to April, 2003 and has served as a director of the      
|                                           | Company since 1987.                                                    
|Malcolm F. Moore, 56,                      | Mr. Moore joined the Company as Executive Vice President and Chief     
|President and Chief Operating Officer      | Operating Officer in August, 1999. Mr. Moore was elected President and 
|                                           | Chief Operating Officer in April, 2003.                                
|Thomas M. Rettler, 46,                     | Mr. Rettler joined the Company as Vice President and Chief Financial   
|Vice President and Chief Financial Officer | Officer in August, 2004. Prior to joining the Company, Mr. Rettler     
|                                           | served as Vice President, Finance and Chief Financial Officer for WICOR
|                                           | Industries, Inc. (WICOR), a manufacturing subsidiary of Wisconsin      
|                                           | Energy Corporation, from 2003 to July 2004. Mr. Rettler was also Vice  
|                                           | President, Finance for Sta-Rite Industries Inc., a subsidiary of WICOR,
|                                           | from 1999 to July 2004.                                                
|Daniel M. Keyes, 38,                       | Mr. Keyes joined the Company as Vice President Sales and Marketing in  
|Vice President Sales and Marketing         | December 2000. From 1996 until joining the Company, Mr. Keyes held a   
|                                           | variety of senior marketing management positions, most recently,       
|                                           | Director, Strategic Accounts, with CNH Global NV (a manufacturer of    
|                                           | agricultural and construction equipment).                              
|Daniel L. Miller, 48,                      | Mr. Miller joined the Company as Director of Manufacturing Operations  
|Vice President Manufacturing  Operations   | in October, 2001. Mr. Miller was appointed Vice President,             
|                                           | Manufacturing Operations in December, 2005. Prior to joining the       
|                                           | Company, Mr. Miller held a variety of management positions in          
|                                           | manufacturing and distribution, most recently General Manager of       
|                                           | Distribution and Logistics and Operations Manager of multiple          
|                                           | facilities for Woods Equipment Company, a manufacturer of              
|                                           | agricultural, turf, and construction equipment.                        
|James J. Monnat, 51,                       | Mr. Monnat joined the Company as Treasurer and Director of Tax in      
|Treasurer                                  | January, 2005, and was appointed to the executive officer position of  
|                                           | Treasurer in July, 2005. Prior to joining the Company, Mr. Monnat      
|                                           | served as Chief Financial Officer and Treasurer of WE Power, LLC, a    
|                                           | Wisconsin Energy Corporation subsidiary, from December, 2001 to        
|                                           | September, 2004. Mr. Monnat was an independent financial consultant    
|                                           | during 2001. Mr. Monnat was Treasurer of WICOR, Inc., a                
|                                           | Milwaukee-based utility holding company, from 1998 to 2000.            

12

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|                                       |                                                                        
|-------------------------------------- | -----------------------------------------------------------------------
|Name, Age and Position                 | Business Experience                                                    
|Michael J. Mulcahy, 60,                | Mr. Mulcahy has served as General Counsel of the Company since 1974 and
|Vice President, Secretary  and General | became Secretary in 1977 and a Vice President in 1986.                 
|Counsel                               
|Kenneth H. Feucht, 58,                 | Mr. Feucht has served as Vice President of Human Resources since May,  
|Vice President of Human Resources      | 2002. Mr. Feucht was Director of Human Resources from 1999 to 2002 and 
|                                       | Manager of Human Resources from 1993 to 1999.                          

All
officers of the Company are elected annually by the Board of Directors following the
Annual Meeting of Shareholders. The Company has an employment agreement with William D.
Gehl, pursuant to which he is to serve as Chief Executive Officer of the Company through
the expiration of the agreement on June 14, 2008.

13

---

# PART II

# Item 5. Market for
Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock in open market or privately negotiated transactions. The plan does not have
an expiration date. No shares were repurchased under the plan during 2006. As of December
31, 2006, the Company had authority to repurchase 227,850 shares under the plan.

The
Companys common stock is traded on the Nasdaq Global Select Market under the symbol
GEHL. A summary of the high and low prices of Gehls common stock by
quarter, as reported by the Nasdaq Global Select Market, follows.

|              
|--------------
|
|2005          
|First Quarter 
|Second Quarter
|Third Quarter 
|Fourth Quarter
|              
|Year          
|              

The
Company did not declare or pay any cash dividends in 2006 or 2005 and does not anticipate
paying any cash dividends on its common stock in the foreseeable future. As of February
20, 2007, shareholders of record numbered 410.

14

---

# Performance Information

The
following graph compares the cumulative total return (change in stock price plus
reinvested dividends) of the Common Stock with the Standard & Poors 500
Composite Index and the Standard & Poors Small Cap Construction and Farm
Machinery Index. The graph assumes $100 was invested on December 31, 2001 in each of the
three alternatives, and that all dividends were reinvested.

# Comparison of Five
Year Cumulative Market PerformanceAmong S&P 500 Index, S&P Small Cap Construction
and Farm Machinery Index, and the Company  (Assumes $100 invested
December 31, 2001 with dividends reinvested)



|                          
|--------------------------
|December 31,
2001         
|S&P Composite 500         
|                          
|S&P Small Cap Construction
|and Farm Machinery Index  
|                          
|Gehl                      
|                          

15

---

# Item 6. Selected
Financial Data

|Five Year Financial Summary                        
|---------------------------------------------------
|Dollars in Thousands, Except Per Share Data        
|Summary of Operations                              
|Net sales                                          
|Gross profit                                       
|Income from operations                             
|Income from continuing operations before income    
|taxes                                              
|Income from continuing operations                  
|(Loss) income from discontinued operations, net    
|of tax                                             
|Net income                                         
|                                                   
|Financial Position at December 31                  
|Current assets                                     
|Current liabilities                                
|Working capital                                    
|Accounts receivable - net                          
|Finance contracts receivable - net                 
|Inventories                                        
|Assets of discontinued operations - net            
|Property, plant and equipment - net                
|Total assets                                       
|Long-term debt                                     
|Total debt                                         
|Shareholders equity                               
|                                                   
|Common Share Summary                               
|Diluted income per share from continuing operations
|Basic income per share from continuing operations  
|Dividends per share                                
|Book value per share at year-end                   
|Shares outstanding at year-end                     
|Other Financial Statistics                         
|Capital expenditures                               
|Current ratio                                      
|Percent total debt to total capitalization         
|Income from continuing operations as a percent of  
|net sales                                          
|After-tax continuing operations return on average  
|shareholders equity                               
|Employees at year-end                              
|Common stock price range                           

16

---

# Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations

# Overview

The
Companys net sales in 2006 of $486.2 million were $39.3 million, or 9% above the
2005 net sales of $447.0 million.

Income
from operations in 2006 was $46.1 million, or 9.5% of net sales compared with 2005 income
from operations of $38.8 million or 8.7% of net sales.

Income
from continuing operations in 2006 was $28.1 million, or $2.26 per diluted share, compared
with $22.1 million, or $2.00 per diluted share in 2005.

The
Companys total assets increased to $365.1 million at December 31, 2006 from $348.2
million at December 31, 2005, primarily due to increased receivables and inventories as a
result of the 9% increase in net sales. Total outstanding debt decreased to $50.5 million
at December 31, 2006 from $54.9 million at December 31, 2005, primarily due to the
application of proceeds received from the increased utilization of the Companys
securitization facility for finance contract receivables.

# Discontinued Operations

In
March 2006, the Company decided to discontinue the manufacturing and distribution of its
agricultural implement products. The agricultural implement business included one
manufacturing facility and related manufacturing machinery and equipment. The reduction in
headcount totaled 140 employees, which included both manufacturing and administrative
positions related to the agricultural implement product line. As a result of this action,
the Consolidated Financial Statements and related notes have been restated to present the
results of the agricultural implement business as discontinued operations.

The
discontinuation of the agricultural implement product line resulted in an after-tax charge
to the Companys earnings for the year ended December 31, 2006 of $7.8 million, or
$0.63 per diluted share. The after-tax charge reflects a reduction from the second quarter
2006 estimate of $9.0 million, or $0.73 per diluted share, due to higher than expected
proceeds from the sale of machinery and equipment associated with the discontinued
operations. The after-tax charge is comprised of non-cash asset impairment charges of $5.9
million related to agricultural implement field and factory inventory and certain
property, plant and equipment, and cash charges related to severance and other employee
termination costs of $1.9 million.

The
Company has reflected the results of its agricultural implements business as discontinued
operations in the Consolidated Statements of Income and prior periods have been restated.
Summary results of operations for the agricultural implements product line were as follows
(in thousands):

|                                                   | Years ended December 31,
|-------------------------------------------------- | ------------------------
|2005                                               | 2004                    
|Net sales                                          |                         
|Pretax loss from discontinued operations           |                         
|Pretax loss on disposal of discontinued operations |                         
|Income tax benefit                                 |                         
|                                                  
|Loss from discontinued operations                  |                         
|                                                  

17

---

The assets of the agricultural
implements business are reflected as net assets of discontinued operations in the
Consolidated Balance Sheets and were as follows (in thousands):

|2006                                  
|--------------------------------------
|Accounts receivable, net              
|Inventories                           
|Property, plant, and equipment, net   
|                                      
|Assets of discontinued operations, net
|                                      

# Business Segments

SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information,
establishes the standards for reporting information about operating segments in financial
statements.  Historically the Company had two operating and reportable segments,
construction equipment and agricultural equipment.  The products in the historical
agricultural equipment segment included material handling equipment (skid loaders,
telescopic handlers, compact excavators, compact track loaders and all-wheel-loaders) and
agricultural implement products for haymaking, forage harvesting, feedmaking and manure
handling.  In the first quarter of 2006, the Company re-evaluated its operating and
reportable segments in connection with the discontinuation of the manufacturing and
distribution of its agricultural implement product line and determined that it now has
only one operating and reportable segment.  Sales
of material handling equipment that were previously included in the agricultural equipment
segment and sales that were previously included in the construction equipment segment are
now combined for both internal and external reporting purposes.

# Sales of Common Stock
and Stock Split

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares by it in the offering, after deducting underwriting discounts,
commissions and expenses. The Company used the net proceeds it received from the offering
to repay debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

On
July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou
BF S.A. (Manitou), the worlds largest manufacturer of telescopic
handlers, the Company issued 1,442,652 shares of common stock to Manitou at an aggregate
purchase price of $19.8 million. The proceeds from the sale of the common stock were used
to pay down the Companys line of credit facility. Beginning in 2005, the Company and
Manitou distributed select models of each others telescopic handler product lines in
the United States through their respective dealer networks.

18

---

# Results of Operations

# 2006 vs. 2005

Net Sales

Net
sales for 2006 were $486.2 million compared to $447.0 million in 2005, an increase of
$39.3 million, or 9%. Net sales, in general, were favorably impacted by market share gains
and the solid fundamentals of the Companys global markets during 2006. International
demand for the Companys skid loaders was strong as total shipments of skid loaders
increased 5% from 2005, including shipments of skid loaders by the Companys European
subsidiary, Gehl Europe. Telescopic handler shipments in 2006 increased 34% from 2005 as
demand from larger rental customers remained strong through most of 2006. These increases
were partially offset by decreased demand for compact track loaders and compact excavators
during 2006 that resulted in sales decreases from 2005 of 1% and 9%, respectively. The
Companys attachment subsidiary, CE Attachments, Inc. increased sales 7% from 2005.
In addition to the increased shipments noted above, approximately 2.4 percentage points of
the net sales increase was due to price increases during 2005 and 2006.

Of
the Companys total net sales reported for 2006, $100.2 million, or 21% were made to
customers residing outside of the United States compared with $72.9 million, or 16% in
2005. The increase in export sales was primarily due to increased sales in Europe.

Gross Profit

Gross
profit was $104.4 million in 2006 compared to $92.3 million in 2005, an increase of $12.1
million, or 13%. Gross profit as a percentage of net sales (gross margin) was
21.5% for 2006 compared to 20.6% for 2005. Gross margin in 2006 was favorably impacted by
approximately 1.7 percentage points due to 2005 and 2006 price increases and approximately
1.1 percentage points due to improved plant efficiencies and reduced overhead spending.
These favorable impacts were partially offset by the impact of changes in product mix
(approximately 1.3 percentage points) and increases in the cost of steel and component
parts (approximately 0.6 percentage points).

Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $58.3 million, or 12% of net sales, for 2006
compared to $53.4 million, or 12% of net sales, for 2005. The increase in spending is
primarily the result of items that vary with sales levels, as well as compensation expense
of $1.1 million, or 0.2% of net sales, related to the expensing in 2006 of stock-based
awards pursuant to Financial Accounting Standards Board (FASB) Statement No.
123R. Selling, general and administrative expenses in 2006 also included a fourth quarter
charge of $1.1 million for an accounts receivable reserve related to a customer account
currently in collection. Selling, general and administrative expenses as a percentage of
net sales remained flat in 2006 despite the fourth quarter accounts receivable charge and
the expense recorded under FASB Statement No. 123R as the growth in net sales more than
exceeded expense increases.

Income from Operations

Income
from operations for 2006 was $46.1 million, or 9.5% of net sales, compared to income from
operations of $38.8 million, or 8.7% of net sales, for 2005, an increase of $7.3 million,
or 19%. The increase in income from operations is primarily due to the 9% increase in net
sales from 2005 and the increase in gross margin to 21.5% from 20.6% in 2005. The
favorable impact of these increases was partially offset by an increase in selling,
general, and administrative expenses including a $1.1 million accounts receivable reserve
and $1.1 million of expense related to stock based awards pursuant to FASB Statement No.
123R.

19

---

Interest Expense

Interest
expense was $3.6 million for 2006 compared to $5.5 million for 2005, a decrease of $1.8
million, or 33%. The decrease in interest expense was due to a decrease in the average
outstanding debt during 2006 compared to 2005. See Liquidity and Capital
Resources below for a discussion of changes in outstanding debt.

Interest Income

Interest
income was $4.3 million for both 2006 and 2005. The increase in accounts receivable and
interest rates throughout 2006 was offset by a decreased average balance of finance
contracts receivable compared to 2005. See Liquidity and Capital Resources
below for a discussion of the changes in the balance of finance contracts receivable and
accounts receivable.

Other Expense, net

The
Company recorded net other expense of $3.9 million and $4.3 million in 2006 and 2005,
respectively. The decrease in net other expense was primarily due to a $0.8 million
decrease in costs incurred with the implementation of the asset securitization programs
that occurred during 2006 and 2005 as well as, $0.8 million of foreign currency gains
recorded during 2006 compared to a minimal loss recorded in 2005. These impacts were
partially offset by a $1.4 million increase in the cost of selling finance contracts,
which in 2005 included a $0.4 million realized gain on the termination of interest rate
swap contracts the Company had previously put in place to hedge the gain/loss on sale of
finance contracts (see notes 5 and 13 in Notes to Consolidated Financial
Statements). The Company sold $234.7 million of contracts during 2006 compared to
$220.8 million during 2005.

Income from Continuing
Operations

Income
from continuing operations in 2006 was $28.1 million, or 5.8% of net sales, compared to
income from continuing operations of $22.1 million, or 5.0% of net sales, in 2005, an
increase of $5.9 million, or 27%. The 2006 income from continuing operations includes the
previously discussed accounts receivable pre-tax charge of $1.1 million. Diluted income
per share from continuing operations were $2.26 in 2006 compared to $2.00 in 2005.

Loss from Discontinued
Operations, Net of Tax

The
Company recorded a loss from discontinued operations, net of tax, of $774,000 in 2006
compared to a loss from discontinued operations, net of tax, of $338,000 in 2005.

Loss on Disposal of
Discontinued Operations, Net of Tax

The
Company recorded a $7.8 million loss on the disposal of discontinued operations, net of
tax, in 2006. See Discontinued Operations above for additional discussion.

Net Income

Net
income was $19.5 million in 2006, or 4% of net sales, compared to net income of $21.8
million in 2005, or 5% of net sales, a decrease of $2.3 million, or 11%. The 2006 net
income included the $7.8 million loss on disposal of discontinued operations noted above.
Diluted net income per share was $1.57 in 2006 compared to $1.97 in 2005. The 2006 net
income includes the previously discussed accounts receivable reserve charge after-tax of
$0.7 million, or $.06 per diluted share, and the $7.8 million, or $0.63 per diluted share,
loss on disposal of discontinued operations.

20

---

# 2005 vs. 2004

Net Sales

Net
sales for 2005 were $447.0 million compared to $325.2 million in 2004, an increase of
$121.7 million, or 37%. Net sales were favorably impacted by the continued strength of the
North American construction markets and market share gains in Europe during the year.
Demand for the Companys skid loaders was strong as shipments increased 22% from
2004, including shipments of skid loaders by the Companys European subsidiary, Gehl
Europe. Telescopic handler shipments in 2005 increased 67% from 2004 as demand from larger
rental customers remained robust in 2005. Demand for compact track loaders and compact
excavators resulted in sales increases from 2004 of 61% and 60%, respectively. The
Companys attachment subsidiary, CE Attachments, Inc. increased sales 24% from 2004.
In addition to the increased shipments noted above, approximately 6 percentage points of
the net sales increase was due to price increases during 2005 and 2004.

Of
the Companys total net sales reported for 2005, $72.9 million, or 16%, were made to
customers residing outside of the United States compared with $57.0 million, or 18%, in
2004. The increase in export sales was primarily due to increased sales in Europe as
discussed above.

Gross Profit

Gross
profit was $92.3 million in 2005 compared to $70.0 million in 2004, an increase of $22.3
million, or 32%. Gross profit as a percentage of net sales (gross margin) was
20.6% for 2005 compared to 21.5% for 2004. The unfavorable impact of product cost
increases (primarily increases in the cost of the material content of the product) on
gross profit was largely offset by multiple price increases implemented by the Company;
however, 2005 gross margin was adversely impacted by 1.1 percentage points because price
increases had not exceeded cost increases to a level that would result in no change in
gross margin. This adverse impact was partially offset by a favorable shift in the mix of
product shipped during 2005 compared to 2004.

Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $53.4 million, or 12.0% of net sales, for 2005
compared to $48.2 million, or 14.8% of net sales, for 2004. The increase in spending is
primarily the result of items that vary with sales levels. Selling, general and
administrative expenses as a percentage of net sales improved as the growth in net sales
exceeded expense increases.

Income from Operations

Income
from operations for 2005 was $38.8 million, or 8.7% of net sales, compared to income from
operations of $21.7 million, or 6.7% of net sales, for 2004, an increase of $17.1 million,
or 79%.

Interest Expense

Interest
expense was $5.5 million for 2005 compared to $2.8 million for 2004, an increase of $2.6
million. The increase in interest expense was due to an increase in the average
outstanding debt during 2005 and an increase in borrowing rates from 2004 to 2005.

Interest Income

Interest
income was $4.3 million for 2005 compared to $2.3 million for 2004, an increase of $2.0
million. The increase in interest income is primarily due to the interest earned on the
increased average balance of finance contracts receivable as well as accounts receivable.

21

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Other Expense, net

The
Company recorded net other expense of $4.3 million and $0.2 million in 2005 and 2004,
respectively. The increase in net other expense was primarily due to $1.5 million in costs
incurred with the implementation of the asset securitization program during 2005 and a
$2.5 million increase in the cost of selling finance contracts, which included a $0.4
million realized gain on the termination of interest rate swap contracts the Company had
previously put in place to hedge the gain/loss on sale of finance contracts (see notes 5
and 13 in Notes to Consolidated Financial Statements). The increase in the
loss on sales of finance contracts was primarily due to the sale of $220.8 million of
contracts during 2005 compared to $65.7 million during 2004. Throughout the second half of
2004, the Company was holding finance contracts for a sale under an asset securitization
program that was finalized in February 2005.

Income from Continuing
Operations

Income
from continuing operations in 2005 was $22.1 million, or 5.0% of net sales, compared to
income from continuing operations of $14.1 million, or 4.3% of net sales, in 2004, an
increase of $8.1 million, or 57%. Diluted income per share from continuing operations were
$2.00 in 2005 compared to $1.54 in 2004.

Provision for Income Taxes

The
Companys effective income tax rate was 33.6% in 2005 and 33.0% in 2004. The increase
in the effective tax rate was primarily due to an increase in the companys federal
tax rate from 34% in 2004 to 35% in 2005.

Loss from Discontinued
Operations, Net of Tax

The
Company recorded a loss from discontinued operations, net of tax, of $338,000 in 2005
compared to a loss from discontinued operations, net of tax, of $690,000 in 2004.

Net Income

Net
income was $21.8 million in 2005, or 4.9% of net sales, compared to net income of $13.4
million in 2004, or 4.1% of net sales, an increase of $8.4 million, or 63%. Diluted net
income per share was $1.97 in 2005 compared to $1.47 in 2004.

# Liquidity and Capital
Resources

Working Capital

The
Companys working capital decreased to $201.5 million at December 31, 2006 from
$212.6 million twelve months earlier. The decrease was primarily the result of a decrease
in finance contracts receivable and assets of discontinued operations and an increase in
short-term borrowings, offset, in part, by an increase in accounts receivable and
inventories.

Accounts Receivable and
Inventories

The
Companys accounts receivable increased $28.9 million to $187.6 million at December
31, 2006. The increase in accounts receivable was due to the 9% increase in net sales
during 2006, which was primarily driven by strong demand for skid loaders and telescopic
handlers. The Companys inventories increased $9.5 million to $48.6 million at
December 31, 2006. The increase in inventories was primarily due to the timing of receipts
and distribution of products manufactured by third parties which are distributed by the
Company.

22

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Finance Contracts
Receivable

Finance
contracts receivable decreased $26.2 million to $8.4 million at December 31, 2006. The
Company had been holding ineligible finance contracts for a sale under a new asset
securitization program from the fourth quarter of 2005 through February 2006. Upon
finalizing the asset securitization program in March 2006, the Company began selling the
previously ineligible contracts, as well as contracts originated after the inception of
the program, through the asset securitization program, which resulted in a decrease in the
balance of finance contracts receivable from December 31, 2005. See Off Balance
Sheet Arrangements  Sales of Finance Contracts Receivable for additional
discussion.

Short-term Borrowings

The
Company used a portion of the proceeds from a new revolving credit facility which was put
in place in October 2006, to repay, in full, the short-term borrowings that were
outstanding at December 31, 2005.

During
the fourth quarter of 2006, the Company began to issue commercial paper through a
placement agent to fund a portion of its short term working capital needs. The Company has
the ability to sell up to $25 million in commercial paper under this arrangement. The
Companys commercial paper program is backed up by the credit commitment under the
Companys revolving credit facility. At December 31, 2006, the Company had $25.0
million of short term commercial paper outstanding.

Capital Expenditures

|2006                
|--------------------
|Capital Expenditures
|Depreciation        
|                    

The
Company expended $6.4 million for property, plant and equipment in 2006, the majority of
which was incurred to expand the Yankton manufacturing facility and upgrade machinery and
equipment. The Company plans to make up to $12.1 million in capital expenditures in 2007,
primarily to complete the Yankton manufacturing facility expansion, enhance manufacturing
and information technology capabilities and maintain and upgrade machinery and equipment.
With the new expansion, the Company believes its Madison and Yankton, South Dakota
facilities will be sufficient to provide adequate capacity for its present manufacturing
activities for the foreseeable future.

Debt and Equity

|2006                
|--------------------
|($ millions)        
|Total Debt          
|Shareholders Equity
|% Total Debt to     
|Total Capitalization
|                    

At
December 31, 2006, shareholders equity had increased $22.3 million to $230.8 million
from $208.5 million a year earlier. This increase primarily reflects the impact of the
2006 net income of $19.5 million, $1.6 million related to the exercise of stock options,
$1.6 million related to share based compensation and $1.1 million related to currency
translation, offset in part by an adjustment of $3.7 million for FASB No. 158,
Employers Accounting for Defined Benefit Plans and Other Postretirement
Plansan amendment of FASB Statements No. 87, 88, 106, and 132(R), discussed
further in Accounting Pronouncements.

23

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In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock. No shares were repurchased under this authorization during 2006 or 2005. As
of December 31, 2006, the Company has repurchased an aggregate of 227,850 shares under
this authorization. All treasury shares acquired by the Company have been cancelled and
returned to the status of authorized but unissued shares.

Borrowing Arrangements

As
of December 31, 2006, the Company maintains a $125 million unsecured revolving credit
facility (the Facility) with a syndicate of commercial bank lenders. The
credit commitment under the Facility is for a five-year period expiring October 17, 2011.
At any time during the term of the Facility, the Company has the option to request an
increase in the credit commitment under the Facility to $175 million from the current
syndicate of commercial bank lenders or any other commercial bank lender(s) selected by
the Company. Under the terms of the Facility, the Company has pledged the capital stock of
certain wholly-owned subsidiaries which are all co-borrowers. The Company may borrow up to
$25 million under the Facility in a currency other than the U.S. Dollar. The Company may
elect to pay interest on U.S. Dollar borrowings under the Facility at a rate of either (1)
the London Interbank Offered Rate (LIBOR) plus 0.625% to 1.375% or (2) a base
rate defined as the prime commercial rate less 0.125% to 1.125%. The Companys actual
borrowing costs for LIBOR or base rate borrowings is determined by reference to a pricing
grid based on the Companys ratio of funded debt to total capitalization. Interest on
amounts borrowed under the Facility in currencies other than the U.S. Dollar will be
priced at a rate equal to LIBOR plus 0.625% to 1.375%. As of December 31, 2006, the
weighted average interest rate on Company borrowings outstanding under the Facility was
5.97%. The Facility requires the Company to maintain compliance with certain financial
covenants related to total capitalization, interest expense coverage, tangible net worth,
capital expenditures and operating lease spending. The Company was in compliance with all
covenants as of December 31, 2006.

Borrowings
under the Facility and the previous secured debt facility were $24.7 million at December
31, 2006 versus $51.5 million a year earlier. Available unused borrowings under the
Facility and the previous secured debt facility were $75.1 million at December 31, 2006
versus $73.5 million a year earlier. Available borrowings at December 31, 2006 were
reduced by $25.0 million of outstanding commercial paper as discussed in Short-term
Borrowings above.

In
May 2006, the Company entered into a $10 million committed line of credit facility with a
commercial bank lender. Borrowings under this facility bear interest at 1.15% above the
LIBOR for 30 day deposits reset monthly and are secured by a first priority lien on an
assigned pool of retail finance contracts receivable. This facility expires on April 30,
2007. There were no borrowings outstanding under this facility at December 31, 2006.

In
addition, the Company has access to a 2.5 million committed foreign short-term
credit facility. There were no borrowings outstanding under this facility at December 31,
2006 and 1.5 million were outstanding at a weighted average interest rate of 3.92%
at December 31, 2005.

The
Company believes it has adequate capital resources and borrowing capacity to meet its
projected capital requirements for the foreseeable future. Requirements for working
capital, capital expenditures, pension fund contributions and debt maturities in fiscal
2007 will continue to be funded by operations and the Companys borrowing
arrangements.

24

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Contractual Obligations

A
summary of the Companys significant contractual obligations as of December 31, 2006
are as follows (in thousands):

|                             
|-----------------------------
|Contractual Obligations:     
|Debt Obligations             
|Operating Leases             
|                             
|Total Contractual Obligations
|                             

Debt
obligations do not include interest payments on the outstanding debt balance.

Off-Balance Sheet
Arrangements  Sales of Finance Contracts Receivable

The
sale of finance contracts is an important component of the Companys overall
liquidity. In March 2006, the Company entered into an asset securitization facility
(the Securitization Facility) with a financial institution (the
Purchaser) whereby the Company can sell, through a revolving securitization
facility, up to $300 million of retail and fleet installment sale contracts
(installment sale contracts or finance contracts receivable). The
Securitization Facility has a final maturity date in March 2009, subject to annual renewal
by the Purchaser. Under the Securitization Facility, the Company sells portfolios of its
finance contracts receivable to a wholly-owned, bankruptcy-remote special purpose
subsidiary (SPE) which, in turn, sells each such portfolio to a wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE. The wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE sells a participating interest in
each such portfolio of finance contracts receivable to the Purchaser (approximately 90% of
the discounted value of the finance contract receivable portfolio). The Purchaser has no
recourse against the Company for uncollectible finance contracts receivable, if any;
however, the Companys retained interest in the portfolio of finance contracts
receivable is subordinate to the Purchasers interest. The Securitization Facility
replaced the previous $150 million revolving securitization facility the Company
terminated in February 2006. The participating interest in finance contracts receivable
that had been sold under the previous securitization facility was purchased by the
Purchaser in March 2006. At December 31 2006, the Company had available unused capacity of
$104.3 million under the Securitization Facility.

In
addition to the Securitization Facility, the Company has arrangements with multiple
financial institutions to sell its finance contracts receivable with 5% limited recourse
on the sold portfolio of finance contracts receivable. Prior to 2005, the Company sold
certain finance contracts receivable to various financial institutions on a full recourse
basis. The Company continues to service substantially all contracts, whether or not sold.
At December 31, 2006, the Company serviced $354.8 million of sold finance contracts
receivable of which $235.7 million, $86.2 million and $33.0 million were sold through the
Securitization Facility, limited recourse arrangements and full recourse arrangements,
respectively. It is the intention of the Company to continue to sell substantially all of
its existing as well as future finance contracts receivable through an asset
securitization program or limited recourse arrangements. The Company believes that it will
be able to arrange sufficient capacity to sell its finance contracts for the foreseeable
future.

# Accounting Pronouncements

In
July 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes
 an interpretation of FASB Statement No. 109, (FIN 48) was issued,
which prescribes a recognition threshold and measurement process for recording, in the
financial statements, uncertain tax positions taken or expected to be taken in a tax
return. In addition, FIN 48 provides guidance on the recognition, classification,
accounting in interim periods and disclosure requirements for uncertain tax positions. The
Company will adopt FIN 48 effective January 1, 2007 and is currently evaluating the
impact, if any, that FIN 48 will have on the Consolidated Financial Statements.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Plans and Other Postretirement Plansan amendment of FASB Statements No. 87,
88, 106, and 132(R), (SFAS No. 158) which requires employers to fully
recognize the obligations associated with single-employer defined benefit pension, retiree
healthcare and other postretirement plans in their financial statements.  In
addition, SFAS No. 158 requires companies to measure plan assets and liabilities as of the
end of a fiscal year rather than a date within 90 days of the end of the fiscal year.
 The Company adopted SFAS No. 158 effective December 31, 2006, except for the change
in measurement date provisions which are not effective until 2008. The impact of the
adoption was a decrease in total assets of $0.4 million, an increase in total liabilities
of $5.3 million and a decrease in shareholders equity, net of tax, of $3.7 million.

25

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# Critical Accounting
Policies and Estimates

The
preparation of the Companys consolidated financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets, liabilities,
net sales and expenses. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions and materially
impact the carrying value of the assets and liabilities. The Company believes the
following accounting policies are critical to the Companys business operations and
the understanding of the Companys results of operations and financial condition.

Allowance for Doubtful
Accounts

The
Companys accounts receivable are reduced by an allowance for amounts that may be
uncollectible in the future. In circumstances where the Company is aware of a specific
customers inability to meet its financial obligations, a specific reserve for bad
debts is recorded against the accounts receivable balance to reduce the amount due to the
net amount reasonably expected to be collected. Additionally, a general percentage of
outstanding receivables is reserved, based on the Companys past experience of
collectibility. If circumstances change (i.e., higher than expected defaults or an
unexpected material adverse change in a major customers ability to meet its
financial obligations), estimates of the recoverability of amounts due could be reduced by
a material amount.

Inventories

Inventories
are valued at the lower of cost or market value. Cost is determined using the last-in,
first-out (LIFO) method for the majority of the Companys inventories. In valuing
inventory, management is required to make assumptions regarding the level of reserves
required to value potentially obsolete or slow moving items to the lower of cost or market
value. Inventory reserves are established taking into account inventory age and frequency
of use or sale. While calculations are made involving these factors, significant
management judgment regarding expectations for future events is involved. Future events
that could significantly influence managements judgment and related estimates
include general economic conditions in markets where the Companys products are sold,
as well as new products and design changes introduced by the Company.

Accrued Warranty

The
Company establishes reserves related to the warranties provided on its products. Specific
reserves are maintained for programs related to known machine safety and reliability
issues. When establishing specific reserves, estimates are made regarding the size of the
population, the type of program, costs to be incurred and estimated participation.
Additionally, general reserves are maintained based on the historical percentage
relationships of warranty costs to machine sales and applied to current equipment sales.
If these estimates and related assumptions change, reserve levels may require adjustment.

Accrued Product Liability

The
Company records a general reserve for potential product liability claims based on the
Companys prior claim experience and specific reserves for known product liability
claims. Specific reserves for known claims are valued based upon the Companys prior
claims experience, including consideration of the jurisdiction, circumstances of the
accident, type of loss or injury, identity of plaintiff, other potential responsible
parties, analysis of outside counsel, and analysis of internal product liability counsel.
Actual product liability costs could be different due to a number of variables, including
decisions of juries or judges.

26

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Goodwill Impairment

In
connection with SFAS No. 142, Goodwill and Other Intangible Assets, the
Company is required to perform goodwill impairment reviews, at least annually, using a
fair-value-based approach. The Company performs its annual impairment review as of
December 31. As part of the annual impairment review, an estimate of the fair value of the
Company, primarily by using a discounted cash flow analysis, is performed. Significant
assumptions used in this analysis include: expected future revenue growth rates, operating
profit margins, working capital levels and a weighted average cost of capital. Changes in
assumptions could significantly impact the estimate of the fair value of the Company,
which could result in a goodwill impairment charge and could have a significant impact on
the consolidated financial statements.

Pension and
Postretirement Benefits

Pension
and postretirement benefit costs and obligations are dependent on assumptions used in
calculation of these amounts. These assumptions, used by actuaries, include discount
rates, expected return on plan assets for funded plans, rate of salary increases, health
care cost trend rates, mortality rates and other factors. In accordance with accounting
principles generally accepted in the United States, actual results that differ from the
actuarial assumptions are accumulated and amortized to future periods and therefore affect
recognized expense and recorded obligations in future periods. While the Company believes
that the assumptions used are appropriate, differences in actual experience or changes in
assumptions may materially effect its financial position or results of operations.

# 2007 Outlook

Demand
for the Companys products in its North American markets slowed mid-way through the
fourth quarter of 2006. Backlog at February 23, 2007, of $125 million decreased 42% from
the same time a year earlier, but is up $71 million, or 131% from the December 31, 2006
backlog level. In addition to softening market condtions, the Company believes additional
industry manufacturing capacity and available inventory in the market has resulted in
customers delaying orders due to a decrease in lead times.

North
American markets are currently forecasted to be down through the first half of 2007 with
some recovery anticipated over the second half of the year. Industry forecasts for the
first quarter alone project a reduction in demand of anywhere from 5% to 30% depending on
the product category.

Based
on 2007 market forecasts, current company backlog position, new product acceptance rate
and targeted market share gains, the Company expects 2007 net sales to be in the range of
$465 million to $495 million. Despite improving gross margin, full year operating margin
is expected to decline slightly due to incremental operating expense investments in
product research and development and information technology projects totaling
approximately $4.3 million. The Company expects earnings per share from continuing
operations of $2.00 to $2.30 in 2007.

27

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# Item 7A. Quantitative
and Qualitative Disclosures About Market Risk

# Market Risk

The
Company is exposed to market risk from changes in interest rates as well as fluctuations
in currency. See further disclosure relating to variable rate debt under
Managements Discussion and Analysis and Results of Operations  Liquidity
and Capital Resources  Borrowing Arrangements included in Item 7 of this Form
10-K.

# Interest Rate Risk

The
Companys exposure to interest rates relates primarily to outstanding floating
variable rate borrowings that price off short-term market interest rates and the
Companys retained interest in securitized finance contracts receivable.

The
Companys Facility is primarily LIBOR-based and is subject to interest rate changes.
In order to manage interest rate exposures that result from floating rate debt, the
Company entered into, in the fourth quarter of 2005, a interest rate swap agreement with a
major financial institution to exchange variable rate interest obligations for fixed rate
obligations without the exchange of the underlying principal amounts. Effective January
2006, under this agreement, the Companys variable to fixed rate obligations are an
aggregate swapped notional amount of $40 million through January 2008. The aggregate
notional amount of the swap decreases to $30 million effective January 2008, $20 million
effective January 2009, $10 million effective January 2010 and expires in January 2011.
The Company pays a 4.89% fixed interest rate under the swap agreement and receives a 30
day LIBOR variable rate. The reference 30 day LIBOR rate was 5.322% at December 31, 2006.

The
variable to fixed interest rate swap is an effective cash-flow hedge. The fair value of
the swap is recorded on the Consolidated Balance Sheet, with changes in fair value
included in other comprehensive income (loss). Swap gains or losses included in other
comprehensive income (loss) are reclassified into earnings at the time the related
interest expense is recognized or settlement of the obligation occurs.

A
10% increase or decrease in the average cost of the Companys variable rate debt
would result in a change in pre-tax interest expense of approximately $285,000 based on
borrowings outstanding at December 31, 2006.

# Commodity Risk

The
Company is exposed to fluctuations in market prices for commodities, especially steel. The
Company has established arrangements to manage the negotiations of commodity prices and,
where possible, to limit near-term exposure to fluctuations in certain raw material
prices.

# Currency Risk

The
Company has limited exposure to foreign currency exchange fluctuations. Certain sales are
made in Canadian dollars; however, to minimize this exposure, the Company borrows in
Canadian dollars under the Facility. The Company purchases certain inventory components
and finished goods from suppliers in Europe and Japan. To the extent the U.S. dollar
strengthens or weakens against the Euro or the Yen, the Companys purchase price
could be affected under risk sharing mechanisms in certain supply agreements. From time to
time the Company has entered into contracts to hedge a portion of its currency risk
associated with supply agreements which do not contain currency risk sharing mechanisms.
The Company was not a party to any currency hedging contracts at December 31, 2006.

28

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# Item 8. Financial
Statements and Supplementary Data

# INDEX TO FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

|                                                                                           
|-------------------------------------------------------------------------------------------
|Financial Statements:                                                                      
|Managements Annual Report on Internal Control Over Financial Reporting                    
|Report of Independent Registered Public Accounting Firm                                    
|Consolidated Balance Sheets at December 31, 2006 and 2005                                  
|Consolidated Statements of Income for the three years ended December 31, 2006              
|Consolidated Statements of Shareholders Equity for the three years ended December 31, 2006
|Consolidated Statements of Cash Flows for the three years ended December 31, 2006          
|Notes to Consolidated Financial Statements                                                 
|Page                                                                                       
|Financial Statement Schedule:                                                              
|Schedule II - Valuation and Qualifying Accounts for the three years ended December 31, 2006

All other schedules are omitted
because they are not applicable or the required information is shown in the financial
statements or notes thereto.

29

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# Managements
Annual Report on Internal Control Over Financial Reporting

The
Companys management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934. The Companys internal control
over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with accounting principles generally accepted in the
United States.

Because
of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

The
Companys management assessed the effectiveness of the Companys internal
control over financial reporting as of December 31, 2006 using the criteria set forth in
Internal Control  Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, the Companys
management concludes that, as of December 31, 2006, the Companys internal control
over financial reporting was effective based on those criteria.

The
Companys assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2006 has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report which is included
herein.

/s/ William D. Gehl
William D. GehlChairman of the Board of Directorsand Chief Executive Officer

/s/ Thomas M. Rettler
 Thomas M. Rettler Vice President and Chief Financial Officer

30

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# Report of Independent
Registered Public Accounting Firm

To the Board of Directors
and Shareholders of Gehl Company:

We
have completed integrated audits of Gehl Companys consolidated financial statements
and of its internal control over financial reporting as of December 31, 2006, in
accordance with the standards of the Public Company Accounting Oversight Board (United
States). Our opinions, based on our audits, are presented below.

Consolidated financial
statements and financial statement schedule

In
our opinion, the consolidated financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Gehl Company and its
subsidiariesat December 31, 2006 and 2005, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 2006 in
conformity with accounting principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedule listed in the accompanying
index presents fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of these
statements in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As
described in Note 1 to the consolidated financial statements, the Company changed the
manner in which it accounts for employee pension benefits and share based compensation in
2006.

Internal control over
financial reporting

Also,
in our opinion, managements assessment, included in Managements Annual Report
on Internal Control Over Financial Reporting appearing under Item 8, that the Company
maintained effective internal control over financial reporting as of December 31, 2006
based on criteria established in Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is
fairly stated, in all material respects, based on those criteria. Furthermore, in our
opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2006, based on criteria established in Internal
Control  Integrated Framework issued by the COSO. The Companys management
is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting. Our
responsibility is to express opinions on managements assessment and on the
effectiveness of the Companys internal control over financial reporting based on our
audit. We conducted our audit of internal control over financial reporting in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material
respects. An audit of internal control over financial reporting includes obtaining an
understanding of internal control over financial reporting, evaluating managements
assessment, testing and evaluating the design and operating effectiveness of internal
control, and performing such other procedures as we consider necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinions.

A
companys internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles. A companys internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors
of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the companys assets
that could have a material effect on the financial statements.

31

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Because
of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/
PricewaterhouseCoopers LLPMilwaukee, Wisconsin  March 2, 2007

32

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# Gehl Company and
Subsidiaries Consolidated Balance Sheets

|2006                                                                  
|----------------------------------------------------------------------
|Assets                                                                
|Cash                                                                  
|Accounts receivable - net                                             
|Finance contracts receivable - net                                    
|Inventories                                                           
|Assets of discontinued operations - net                               
|Retained interest in sold finance contracts receivable                
|Deferred income tax assets                                            
|Prepaid expenses and other current assets                             
|                                                                      
|Total current assets                                                  
|                                                                      
|Property, plant and equipment - net                                   
|Goodwill                                                              
|Other assets                                                          
|                                                                      
|Total assets                                                          
|                                                                      
|Liabilities and Shareholders Equity                                  
|Current portion of long-term debt obligations                         
|Short-term debt obligations                                           
|Accounts payable                                                      
|Liabilities of discontinued operations                                
|Accrued and other current liabilities                                 
|                                                                      
|Total current liabilities                                             
|                                                                      
|Long-term debt obligations                                            
|Deferred income tax liabilities                                       
|Pension and other postretirement benefits                             
|Other long-term liabilities                                           
|                                                                      
|Total long-term liabilities                                           
|                                                                      
|Common stock, $.10 par value, 25,000,000 shares authorized, 12,197,037
|and 12,006,527 shares outstanding at December 31, 2006 and 2005,      
|respectively                                                          
|Preferred stock, $.10 par value, 2,000,000 shares authorized, 250,000 
|shares designated as Series A preferred stock, no shares issued       
|Capital in excess of par                                              
|Retained earnings                                                     
|Accumulated other comprehensive loss                                  
|                                                                      
|Total shareholders equity                                            
|                                                                      
|Total liabilities and shareholders equity                            
|                                                                      
|Contingencies (Notes 5 and 16)                                        
|                                                                      

The accompanying notes
are an integral part of the financial  statements.

33

---

# Gehl Company and
Subsidiaries  Consolidated Statements of Income

|2006                                                                     
|-------------------------------------------------------------------------
|Net sales                                                                
|Cost of goods sold                                                       
|                                                                         
|Gross profit                                                             
|Selling, general and administrative expenses                             
|                                                                         
|Income from operations                                                   
|Interest expense                                                         
|Interest income                                                          
|Other expense, net                                                       
|                                                                         
|Income from continuing operations before income taxes                    
|Provision for income taxes                                               
|                                                                         
|Income from continuing operations                                        
|Loss from discontinued operations, net of $416, $187 and $341 of tax     
|benefits, respectively                                                   
|Loss on disposal of discontinued operations, net of $4,199 of tax benefit
|                                                                         
|Net income                                                               
|                                                                         
|Diluted net income (loss) per share:                                     
|Continuing operations                                                    
|Discontinued operations                                                  
|                                                                         
|Total diluted net income per share                                       
|                                                                         
|Basic net income (loss) per share:                                       
|Continuing operations                                                    
|Discontinued operations                                                  
|                                                                         
|Total basic net income per share                                         
|                                                                         

The accompanying notes
are an integral part of the financial statements.

34

---

# Gehl Company and
Subsidiaries Consolidated
Statements of Shareholders Equity

|In Thousands                                   | Total | Comprehensive
Income (Loss) | Retained
Earnings | Accumulated
Other
Comprehensive
Loss | Common
Stock | Capital
In Excess
of Par
|---------------------------------------------- | ----- | --------------------------- | ----------------- | ------------------------------------ | ------------ | ------------------------
|Balance at December 31, 2003                   |       |                             | $                 | 98,000                               |              |                         
|Comprehensive income:                          |       |                            
|Net income                                     |       |                             |                   | 13,387                               |              | $                       
|Minimum pension liability adjustments,         |       |                            
|net of $229 of taxes                           |       |                             |                   | 426                                  |              |                         
|Currency translation adjustment                |       |                             |                   | 734                                  |              |                         
|Unrealized gains (losses), net of $15 of taxes |       |                             |                   | 28                                   |              |                         
|                                               |       |                             |                   |                                      |              |                         
|Comprehensive income                           |       |                             |                   |                                      |              | $                       
|                                               |       |                             |                   |                                      |              |                         
|Issuance of common stock                       |       |                             |                   | 19,812                               |              |                         
|Exercise of stock options, including tax       |       |                            
|benefit of $636, and other                     |       |                             |                   | 4,074                                |              |                         
|                                              
|Balance at December 31, 2004                   |       |                             | $                 | 136,461                              |              |                         
|Comprehensive income:                          |       |                            
|Net income                                     |       |                             |                   | 21,800                               |              | $                       
|Minimum pension liability adjustments,         |       |                             |                   | 1,069                                |              |                         
|net of $562 of taxes                           |       |                            
|Currency translation adjustment                |       |                             |                   | (1,355                               | )            |                         
|Unrealized gains (losses), net of $13 of taxes |       |                             |                   | (25                                  | )            |                         
|                                               |       |                             |                   |                                      |              |                         
|Comprehensive income                           |       |                             |                   |                                      |              | $                       
|                                               |       |                             |                   |                                      |              |                         
|Issuance of common stock                       |       |                             |                   | 46,064                               |              |                         
|Exercise of stock options, including tax       |       |                            
|benefit of $1,110, and other                   |       |                             |                   | 4,479                                |              |                         
|                                              
|Balance at December 31, 2005                   |       |                             | $                 | 208,493                              |              |                         
|Comprehensive income:                          |       |                            
|Net income                                     |       |                             |                   | 19,507                               |              | $                       
|Minimum pension liability adjustments,         |       |                             |                   | 597                                  |              |                         
|net of $321 of taxes                           |       |                            
|Currency translation adjustment                |       |                             |                   | 1,070                                |              |                         
|Unrealized gains (losses), net of $27 of taxes |       |                             |                   | 205                                  |              |                         
|                                               |       |                             |                   |                                      |              |                         
|Comprehensive income                           |       |                             |                   |                                      |              | $                       
|                                               |       |                             |                   |                                      |              |                         
|Adoption of FASB Statement No. 158, net of     |       |                             |                   | (3,690                               | )            |                         
|$1,987 of taxes                                |       |                            
|Stock based compensation                       |       |                             |                   | 1,605                                |              |                         
|Exercise of stock options, including tax       |       |                            
|benefit of $1,360, and other                   |       |                             |                   | 2,994                                |              |                         
|                                              
|Balance at December 31, 2006                   |       |                             | $                 | 230,781                              |              |                         
|                                              

The accompanying notes
are an integral part of the financial statements.

35

---

# Gehl Company and
Subsidiaries  Consolidated Statements of Cash Flows

|2006                                                       
|-----------------------------------------------------------
|Cash Flows from Operating Activities                       
|Net income                                                 
|Adjustments to reconcile net income to net cash provided by
|(used for) operating activities:                           
|Loss on discontinued operations (non-cash), net of taxes   
|Depreciation and amortization                              
|Compensation expense for long-term incentive stock grants  
|Gain on sale of property, plant and equipment              
|Cost of sales of finance contracts                         
|Deferred income taxes                                      
|Tax benefit related to exercise of stock options           
|Proceeds from sales of finance contracts                   
|Increase in finance contracts receivable                   
|Increase in retained interest in sold finance contracts    
|(Decrease) increase in cash due to changes in:             
|Accounts receivable - net                                  
|Inventories                                                
|Prepaid expenses and other current assets                  
|Other assets                                               
|Accounts payable                                           
|Other liabilities                                          
|                                                           
|Net cash provided by (used for) operating activities       
|                                                           
|Cash Flows from Investing Activities                       
|Property, plant and equipment additions                    
|Proceeds from sale of property, plant and equipment        
|(Decrease) increase in other assets                        
|                                                           
|Net cash (used for) provided by investing activities       
|                                                           
|Cash Flows from Financing Activities                       
|(Repayments of) proceeds from revolving credit loans       
|Proceeds from short-term borrowings                        
|Repayments of short-term borrowings                        
|(Repayments of) proceeds from other borrowings - net       
|Proceeds from issuance of common stock                     
|Proceeds from exercise of stock options including tax      
|benefit of $1,114, $0 and $0, respectively                 
|                                                           
|Net cash (used for) provided by financing activities       
|                                                           
|Net increase (decrease) in cash                            
|                                                           

The accompanying notes
are an integral part of the financial statements.

36

---

# Gehl Company and
Subsidiaries  Notes To Consolidated Financial Statements

# Note 1 
Significant Accounting Policies

Consolidation:
Gehl Company is engaged in the manufacture and distribution of compact equipment for the
construction and agricultural markets. The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and
balances are eliminated.

Use
of Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions, in certain circumstances, which affect the reported amounts of
assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. Ultimate realization of assets and
settlement of liabilities in the future could differ from those estimates.

Revenue
Recognition: The Company recognizes revenue when all of the following criteria are
met: persuasive evidence of an arrangement exists; delivery has occurred and ownership has
transferred to the dealer or distributor; the price to the dealer or distributor is fixed
and determinable; and collectibility is reasonably assured. The Company meets these
criteria for revenue recognition upon shipment of products to dealers and distributors.

Shipping
and Handling Costs:    The Company records revenues and costs
associated with shipping its products within net sales and cost of goods sold,
respectively.

Discounts
and Sales Incentives: The Company classifies the costs associated with discounts and
sales incentives provided to dealers and distributors as a reduction of net sales.
Discounts are recorded upon shipment and sales incentives are recorded when offered.

Accounts
Receivable: The Company provides financing for its North American dealers. The
financing agreements provide for, in certain instances, interest-free periods which
generally range from four to nine months.

Finance
Contracts Receivable: The Company offers term financing for its products to North
American retail customers and to its North American dealers. Finance contracts require
periodic installments of principal and interest over periods of up to 66 months.

Inventories:
Inventories are valued at the lower of cost or market. Cost is determined by the last-in,
first-out (LIFO) method for the majority of the Companys inventories.

Properties
and Depreciation: Properties are stated at cost. When properties are sold or otherwise
disposed of, cost and accumulated depreciation are removed from the respective accounts
and any gain or loss is included in income. The Company provides for depreciation of
assets using the straight-line method for financial reporting purposes and accelerated
methods for income tax purposes. Depreciation is recorded using the following estimated
useful lives for financial statement purposes:

|                             
|-----------------------------
|Buildings                    
|Machinery and equipment      
|Autos and trucks             
|Office furniture and fixtures
|                             

Expenditures
which substantially increase value or extend asset lives are capitalized. Expenditures for
maintenance and repairs are charged against income as incurred.

37

---

The
Company reviews the carrying value of long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment would be determined based on a comparison of the undiscounted future operating
cash flows anticipated to be generated during the remaining life of the long-lived assets
to the carrying value. Measurement of any impairment loss would be based on discounted
operating cash flows.

Goodwill
and Other Intangible Assets: Goodwill and intangible assets deemed to have indefinite
lives are not amortized; however, such assets must be tested for impairment at least
annually. Amortization is recorded for other intangible assets with definite lives. The
Company is subject to financial statement risk in the event that goodwill becomes
impaired.

Foreign
Currency Transactions: Foreign currency transaction gains and (losses) are included in
the determination of income. Foreign currency gains (losses) were $899,000, $(104,000) and
$228,000 in 2006, 2005 and 2004, respectively.

Foreign
Currency Translation: Assets and liabilities of the Companys foreign subsidiary
are translated at current exchange rates, and related revenues and expenses are translated
at the weighted-average exchange rates in effect for the year. Net exchange gains or
losses resulting from the translation of foreign financial statements and the effect of
exchange rate changes on intercompany transactions of a long-term investment nature are
accumulated and credited or charged directly to a separate component of shareholders
equity, titled Accumulated Other Comprehensive Loss.

Income
Taxes: The Company follows the liability method in accounting for income taxes. The
liability method provides that deferred tax assets and liabilities be recorded based on
the difference between the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes.

Product
Liability Costs: The Company directly assumes all liability for costs associated with
claims up to specified limits in any policy year. Known incidents involving the
Companys products are investigated and reserves are established for any estimated
liability.

Environmental
Costs: Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition caused by
past operations, and that do not contribute to current or future revenue generation, are
expensed. Liabilities are recorded when environmental assessments and/or remedial efforts
are probable, and the costs can be reasonably estimated.

Research
and Development Costs: Costs for research activities relating to product development
and improvement are charged against income as incurred. Such costs amounted to
approximately $2.8 million, $2.6 million and $2.5 million in 2006, 2005 and 2004,
respectively.

Other
Income (Expense): Other income (expense) is comprised primarily of foreign currency
transaction gains (losses), cost of sales of finance contracts, and other nonoperating
items.

Comprehensive
Income: Comprehensive income is defined as the sum of net income and all other
non-owner changes in equity (or accumulated other comprehensive loss). The components of
accumulated other comprehensive loss were as follows (net of tax) (in thousands):

|2006                                               
|---------------------------------------------------
|Minimum pension liability adjustments              
|Unrecognized pension losses and prior service costs
|Currency translation adjustments                   
|Unrealized gains (losses)                          
|                                                   
|Accumulated other comprehensive loss               
|                                                   

38

---

Stock-Based
Compensation: Effective January 1, 2006, the Company adopted Statement of Financial
Accounting Standard (SFAS) No. 123R, Share-Based Payment
(SFAS No. 123R) using the modified prospective method, in which compensation
cost was recognized beginning with the effective date based on the requirements of SFAS
No. 123R for all share-based payments granted after the effective date and all awards
granted to employees prior to the effective date of SFAS No. 123R that were unvested on
the effective date.

Prior
to adopting SFAS No. 123R, as permitted under SFAS No. 123, Accounting for
Stock-Based Compensation (SFAS No. 123), the Company elected to follow
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB No. 25), and related interpretations in accounting for
stock-based awards to employees through December 31, 2005. Accordingly, compensation cost
for stock options and restricted stock grants was measured as the excess, if any, of the
market price of the Companys common stock at the date of grant over the exercise
price. All employee stock options were granted at the grant day market price resulting in
no compensation cost for prior periods. All stock-based compensation expense prior to the
adoption of SFAS No. 123R related to restricted stock grants. See Note 3,
Stock-Based Compensation, for more information.

Accounting
Pronouncements: In July 2006, Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109, (FIN 48) was issued, which
prescribes a recognition threshold and measurement process for recording, in the financial
statements, uncertain tax positions taken or expected to be taken in a tax return. In
addition, FIN 48 provides guidance on the recognition, classification, accounting in
interim periods and disclosure requirements for uncertain tax positions. The Company will
adopt FIN 48 effective January 1, 2007 and is currently evaluating the impact, if any,
that FIN 48 will have on the Consolidated Financial Statements.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Plans and Other Postretirement Plansan amendment of FASB Statements No. 87,
88, 106, and 132(R), (SFAS No. 158) which requires employers to fully
recognize the obligations associated with single-employer defined benefit pension, retiree
healthcare and other postretirement plans in their financial statements.  In
addition, SFAS No. 158 requires companies to measure plan assets and liabilities as of the
end of a fiscal year rather than a date within 90 days of the end of the fiscal year.
 The Company adopted SFAS No. 158 effective December 31, 2006, except for the change
in measurement date provisions which are not effective until 2008. The impact of the
adoption was a decrease in total assets of $0.4 million, an increase in total liabilities
of $5.3 million and a decrease in shareholders equity, net of tax, of $3.7 million.

# Note 2 
Discontinued Operations

In
March 2006, the Company decided to discontinue the manufacturing and distribution of its
agricultural implement products. The agricultural implement business included one
manufacturing facility and related manufacturing machinery and equipment. The reduction in
headcount totaled 140 employees, which included both manufacturing and administrative
positions related to the agricultural implement product line. As a result of this action,
the Consolidated Financial Statements and related notes have been restated to present the
results of the agricultural implement business as discontinued operations.

The
discontinuation of the agricultural implement product line resulted in an after-tax charge
to the Companys earnings for the year ended December 31, 2006 of $7.8 million, or
$0.63 per diluted share. The after-tax charge reflects a reduction from the second quarter
estimate of $9.0 million, or $0.73 per diluted share, due to higher than expected proceeds
from the sale of machinery and equipment associated with the discontinued operations. The
after-tax charge is comprised of non-cash asset impairment charges of $5.9 million related
to agricultural implement field and factory inventory and certain property, plant and
equipment, and cash charges related to severance and other employee termination costs of
$1.9 million.

39

---

The following table summarizes the
pre-tax charge associated with the discontinued operations (in thousands):

|                            
|----------------------------
|Pre-tax charge              
|Non-cash adjustments        
|Cash payments               
|                            
|Balance at March 31, 2006   
|                            
|Pre-tax charge              
|Non-cash adjustments        
|Cash payments               
|                            
|Balance at December 31, 2006
|                            

The
Company has reflected the results of its agricultural implements product line as
discontinued operations in the Consolidated Statements of Income and prior periods have
been restated. Summary results of operations for the agricultural implements business were
as follows (in thousands):

|2006                                              
|--------------------------------------------------
|Net sales                                         
|Pretax loss from discontinued operations          
|Pretax loss on disposal of discontinued operations
|Income tax benefit                                
|                                                  
|Loss from discontinued operations                 
|                                                  

The
assets of the agricultural implements product line are reflected as net assets of
discontinued operations in the Consolidated Balance Sheets and were as follows (in
thousands):

|2006                                  
|--------------------------------------
|Accounts receivable, net              
|Inventories                           
|Property, plant, and equipment, net   
|                                      
|Assets of discontinued operations, net
|                                      

# Note 3 
Stock-Based Compensation

The
Company maintains equity incentive plans for certain of its directors, officers and key
employees. The Company currently has three primary equity incentive plans: the 2004 Equity
Incentive Plan, the 2000 Equity Incentive Plan, and the 1995 Stock Option Plan. The 2004
Equity Incentive Plan, which was adopted in April 2004 and amended in April 2006,
authorizes the granting of awards with respect to up to 737,500 shares of the
Companys common stock. During April 2000, the 2000 Equity Incentive Plan was
adopted, which authorizes the granting of awards with respect to up to 812,771 shares of
the Companys common stock. An award is defined within the 2004 and 2000 Equity
Incentive Plan as a stock option, stock appreciation right, restricted stock or
performance share. In April 1996, the 1995 Stock Option Plan was adopted, which authorizes
the granting of options to purchase up to 726,627 shares of the Companys common
stock. These plans provide that options be granted at an exercise price not less than fair
market value on the date the options are granted and that the options generally vest
ratably over a period not exceeding three years after the grant date. The option period
may not be more than ten years after the grant date.

40

---

Following
is a summary of option activity in the equity incentive plans for 2006:

|                              
|------------------------------
|Outstanding, December 31, 2005
|                              
|Granted                       
|Exercised                     
|Cancelled                     
|                              
|Outstanding, December 31, 2006
|                              

In
2006, 2005 and 2004, the Company awarded stock options to certain key employees. Awards of
stock options under the plans are subject to certain vesting requirements. There were
129,284, 24,000 and 167,475 stock options awarded in 2006, 2005 and 2004, respectively,
with a weighted average fair market value of $13.80, $13.90 and $11.02 per share,
respectively. The aggregate intrinsic value of the options exercised during year ended
December 31, 2006 totaled $3.9 million.

Options
outstanding for the plans at December 31, 2006 were as follows:

|Range of Exercise
Prices | Outstanding
Shares | Weighted Average
Remaining
Contractual
Life (years) | Weighted Average
Exercise Price
per Share | Aggregate
Intrinsic
Value (000s)
|------------------------ | ------------------ | --------------------------------------------------- | ----------------------------------------- | ---------------------------------
|$5.00 - $9.99            | 346,012            | 5.07                                                | $  8.72                                   | $  6,507                         
|$10.00 - $14.99          | 153,000            | 4.70                                                | $11.50                                    | $  2,452                         
|$15.00 - $19.99          | 135,575            | 8.02                                                | $17.12                                    | $  1,411                         
|$30.00 - $35.99          | 125,284            | 9.19                                                | $34.35                                    | $       --                       
|                        

Options exercisable
under the plans at December 31, 2006 were as follows:

|Range of Exercise
Prices | Exercisable
Shares | Weighted Average
Exercise Price
per Share | Aggregate
Intrinsic
Value (000s)
|------------------------ | ------------------ | ----------------------------------------- | ---------------------------------
|$5.00 - $9.99            | 346,012            | $  8.72                                   | $  6,507                         
|$10.00 - $14.99          | 139,135            | $11.47                                    | $  2,235                         
|$15.00 - $19.99          | 83,313             | $16.90                                    | $     886                        
|                        

41

---

In
2006, 2005 and 2004, the Company awarded restricted shares under the 2004 Equity Incentive
Plan to certain key employees. Awards of restricted stock under the plan are subject to
certain vesting requirements. There were 26,257, 5,250 and 42,728 restricted shares
awarded in 2006, 2005 and 2004, respectively, with an average fair market value of $34.04,
$29.05 and $15.83 per share. Compensation expense related to restricted stock awards is
based upon the market price at the date of award and is charged to earnings over the
vesting period. Compensation expense related to the awarding of restricted shares was
$478,790, $232,000 and $15,000 for 2006, 2005 and 2004, respectively.

|                                         
|-----------------------------------------
|Outstanding (unvested), December 31, 2005
|                                         
|Granted                                  
|Vested                                   
|Forfeited                                
|                                         
|Outstanding (unvested), December 31, 2006
|                                         

Effective
January 1, 2006, the Company adopted the provisions of SFAS No. 123R which establishes
accounting for equity instruments exchanged for employee services. Under the provisions of
SFAS No. 123R, share-based compensation cost is measured at the grant date, based on a
calculated fair value of the award, and is recognized as an expense over the
employees requisite service period (vesting period of the equity grant). Prior to
January 1, 2006, the Company accounted for share-based compensation to employees in
accordance with APB No. 25 and related interpretations. The Company also followed the
disclosure requirements of SFAS No. 123 as amended by SFAS No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure (SFAS No.
148). The Company elected to adopt the modified prospective transition method as
provided by SFAS No. 123R and, accordingly, financial statement amounts for the prior
periods presented in this Form 10-K have not been restated to reflect the fair value
method of expensing share-based compensation.

The
Company estimates the fair value of stock options using the Black-Scholes valuation model.
Key input assumptions used to estimate the fair value of stock options include the
exercise price of the award, the expected option term, the expected volatility of the
Companys stock over the options expected term, the risk-free interest rate
over the options expected term, and the Companys expected annual dividend
yield. The Company believes that the valuation technique and the approach utilized to
develop the underlying assumptions are appropriate in calculating the fair values of the
Companys stock options granted during the ended December 31, 2006. Estimates of fair
value are not intended to predict actual future events or the value ultimately realized by
persons who receive equity awards.

The
fair value of the option grants during the years ended December 31, 2006, 2005, and 2004
were estimated on the grant date using the Black-Scholes option-pricing model with the
following assumptions:

|                              
|------------------------------
|December 31, 2006             
|Expected option term (1)      
|Expected volatility factor (2)
|Risk-free interest rate (3)   
|Expected annual dividend yield

| | (1) | The
option term for 2006 grants was determined using historical exercise data
               including all exercises occurring during the last ten year period. The
option                terms for 2005 and 2004 were determined using the simplified method
for                estimating option life under Staff Accounting Bulletin No. 107 Share-Based
               Payment, which expresses the SEC staffs views regarding the
               interaction between SFAS No. 123R and certain SEC rules including the
valuation                of share-based payments.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
stock volatility for each grant is based on the historical volatility of the
               Companys common stock over the most recent period equal to the
expected                option life of the grant.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

42

---

| | (3) | The
risk-free interest rate for periods equal to the expected term of the share
               option is based on the 4.5-year U.S. Treasury Strip Rate for 2006 and the
7-year                U.S. Treasury Strip Rate for 2005 and 2004 in effect at the date of
the grant.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For
the year ended December 31, 2006, the Company recognized pre-tax compensation expense of
$1.1 million related to unvested stock options. The after tax impact totaled $0.7 million,
or $0.06 per diluted share. As of December 31, 2006, there was $2.3 million of total
unrecognized compensation cost related to unvested share-based compensation arrangements
granted under the Companys equity incentive plans. That cost is expected to be
recognized over a weighted-average period of 1.2 years.

The
Company did not recognize compensation expense for employee share-based awards for the
year ended December 31, 2005, as the exercise price of the Companys employee stock
awards equaled the market price of the underlying stock on the date of grant. The Company
did recognize compensation expense under APB No. 25 relating to certain restricted stock
grants as the grants have no exercise price.

The
Company had previously adopted the provisions of SFAS No. 123 as amended by SFAS No. 148
through disclosure only. The following table illustrates the effects on net income and
earnings per share as if the Company had applied the fair value recognition provisions of
SFAS No. 123 to share based employee awards (in thousands, except per share data).

|Year Ended December 31,                                         | 2005 | 2004
|--------------------------------------------------------------- | ---- | ----
|Net income, as reported                                         |      |     
|Add: stock-based compensation expense included in               |      |     
|reported net income under APB No. 25, net of tax                |      |     
|Less: stock-based compensation expense determined based on fair |      |     
|value method, net of tax                                        |      |     
|                                                               
|Pro forma net income                                            |      |     
|                                                               
|Diluted net income per share:                                   |      |     
|As reported                                                     |      |     
|Pro forma                                                       |      |     
|Basic net income per share:                                     |      |     
|As reported                                                     |      |     
|Pro forma                                                       |      |     
|                                                               

43

---

# Note 4  Accounts
Receivable

Accounts
receivable were comprised of the following (in thousands):

|2006                        
|----------------------------
|Accounts receivable         
|Less allowances for:        
|doubtful accounts           
|returns and dealer discounts
|                            
|                            
|                            

The
Company retains as collateral a security interest in the equipment associated with
accounts receivable.

# Note 5  Finance
Contracts Receivable

Unsold
finance contracts receivable were comprised of the following (in thousands):

|2006                           
|-------------------------------
|Finance contracts receivable   
|allowance for doubtful accounts
|                               
|                               
|Less: non-current portion      
|                               
|Current portion                
|                               

The
unsold finance contracts receivable at December 31, 2006 have a weighted-average interest
rate of approximately 5.8%. The Company retains as collateral a security interest in the
equipment associated with unsold finance contracts receivable. The Company also maintains
certain levels of dealer recourse deposits as additional security associated with finance
contracts receivable. The dealer recourse deposits totaled $2.3 million and $2.5 million
at December 31, 2006 and 2005, respectively.

In
March 2006, the Company entered into an asset securitization facility (the
Securitization Facility) with a financial institution (the Purchaser)
whereby the Company can sell, through a revolving securitization facility, up to $300
million of retail and fleet installment sale contracts (installment sale
contracts or finance contracts receivable). The Securitization Facility
has a final maturity date in March 2009, subject to annual renewal by the Purchaser. Under
the Securitization Facility, the Company sells portfolios of its finance contracts
receivable to a wholly-owned, bankruptcy-remote special purpose subsidiary
(SPE) which, in turn, sells each such portfolio to a wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE. The wholly-owned
bankruptcy-remote special purpose subsidiary of the SPE sells a participating interest in
each such portfolio of finance contracts receivable to the Purchaser (approximately 90% of
the discounted value of the finance contract receivable portfolio). The Purchaser has no
recourse against the Company for uncollectible finance contracts receivable, if any;
however, the Companys retained interest in the portfolio of finance contracts
receivable is subordinate to the Purchasers interest. The Company has retained
collection and administrative responsibilities for each sold portfolio of finance
contracts receivable. The Company incurred one-time transaction costs of $0.7 million,
which are included in other expense in the accompanying Consolidated Statement of Income,
related to the implementation of the Securitization Facility.

The
Securitization Facility replaced the previous $150 million revolving securitization
facility the Company terminated in February 2006. The participating interest in finance
contracts receivable that had been sold under the previous securitization facility was
purchased by the Purchaser in March 2006.

44

---

The
following summarizes the Companys sales of retail finance contracts receivable
through the asset securitization facilities (in thousands):

|                                    | 2006
|----------------------------------- | ----
|Value of contracts sold             |     
|Cash received on sales of contracts |     
|                                   
|Retained interest in contracts sold |     
|                                   
|Cost of sales of finance contracts  |     
|                                   

The
Companys retained interest is recorded at fair value, which is calculated based on
the present value of estimated future cash flows and reflects prepayment and loss
assumptions, which are based on historical results. At December 31, 2006, the fair value
of the retained interest was calculated using an interpolated risk-free rate of return of
4.81% based on U.S. Treasury rates, an approximate 17 month weighted-average prepayable
portfolio life and an approximate 1.0% annual loss rate. Changes in any of these
assumptions could affect the calculated value of the retained interest. A 10% increase in
the discount rate would decrease the fair value of the retained interest by $0.2 million.
A 10% increase in the annual loss rate would decrease the fair value of the retained
interest by $0.8 million. Retained interest of $20.3 million was included in retained
interest in sold finance contracts receivable which is part of current assets and $16.8
million was included in other assets in the accompanying Consolidated Balance Sheet at
December 31, 2006.

The
total credit capacity under the 2006 Securitization Facility is $300 million, with finance
contracts receivable sold and being serviced by the Company totaling $235.7 million at
December 31, 2006. Of the $235.7 million in sold contracts receivable, $9.8 million were
greater than 60 days past due at December 31, 2006. Credit losses on contracts sold
through the program were $29,000 as of December 31, 2006.

During
2005, the loss on sale of finance contracts receivable was partially offset by a $0.4
million realized gain on the termination of interest rate swap contracts that were put in
place to hedge gains / losses on the sale of finance contracts receivable (see Note 13).
The Company received $1.7 million, $0.7 million and $0 in service fee income during 2006,
2005 and 2004, respectively.

In
addition to the sale of finance contracts receivable through the asset Securitization
Facility, the Company sold finance contracts through limited recourse arrangements during
2006 and 2005. Based on the terms of the sales, recourse to the Company is limited to 5%
of the sold portfolio of finance contracts receivable. During 2004, the Company sold
finance contracts through various full recourse arrangements. Amounts to cover potential
losses on these sold finance contracts receivable are included in the allowance for
doubtful accounts. The following table summarizes the Companys sales of finance
contracts receivable through these arrangements during 2006, 2005 and 2004 (in thousands):

|                                    | 2006
|----------------------------------- | ----
|Value of contracts sold             |     
|Cash received on sales of contracts |     
|                                   
|Cost of sales of finance contracts  |     
|                                   

At
December 31, 2006, the Company serviced $354.8 million of sold finance contracts
receivable of which $235.7 million, $86.2 million and $33.0 million were sold through the
asset Securitization Facility, limited recourse arrangements and full recourse
arrangements, respectively.

The
finance contracts require periodic installments of principal and interest over periods of
up to 66 months, with interest rates based on market conditions. The Company has retained
the servicing of substantially all of these contracts which generally have maturities of
12 to 60 months.

The
sales of finance contracts receivable were accounted for as a sale in accordance with SFAS
No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilitiesa Replacement of FASB Statement No. 125. Sales of
finance contracts receivable are reflected as a reduction of finance contracts receivable
in the accompanying Consolidated Balance Sheets and the proceeds received are included in
cash flows from operating activities in the accompanying Consolidated Statements of Cash
Flows.

45

---

# Note 6  Inventories

The
LIFO costing method was used for 72% and 70% of the Companys inventories at December
31, 2006 and 2005, respectively. If all of the Companys inventories had been valued
on a current cost basis, which approximates FIFO value, estimated inventories by major
classification would have been as follows (in thousands):

|2006                       
|---------------------------
|Raw materials and supplies 
|Work-in-process            
|Finished machines and parts
|                           
|Total current cost value   
|Adjustment to LIFO basis   
|                           
|                           
|                           

During
2006, inventory quantities were reduced in two of the Companys four LIFO
pools.  This reduction resulted in a liquidation of LIFO inventory quantities carried
at lower costs prevailing in prior years as compared with the cost of 2006 purchases, the
effect of which decreased cost of goods sold by approximately $1.1 million and increased
net income by approximately $0.7 million.

# Note 7  Property,
Plant and Equipment  Net

Property,
plant and equipment consisted of the following (in thousands):

|2006                             
|---------------------------------
|Land                             
|Buildings                        
|Machinery and equipment          
|Autos and trucks                 
|Office furniture and fixtures    
|Leasehold improvements           
|                                 
|                                 
|Less: accumulated depreciation   
|                                 
|Property, plant and equipment-net
|                                 

The
Company recorded depreciation expense totaling $4.5 million, $4.9 million and $4.6 million
for 2006, 2005 and 2004, respectively.

46

---

# Note 8  Debt
Obligations

A
summary of the Companys debt obligations, and related current maturities, is as
follows (in thousands):

|2006                      
|--------------------------
|Commercial paper          
|Line of credit facility   
|Other debt obligations    
|                          
|                          
|Less: current portion     
|                          
|Long-term debt obligations
|                          

As
of December 31, 2006, the Company maintains a $125 million unsecured revolving credit
facility (the Facility) with a syndicate of commercial bank lenders. The
credit commitment under the facility is for a five-year period expiring October 17, 2011.
At any time during the term of the Facility, the Company has the option to request an
increase in the credit commitment under the Facility to $175 million from the current
syndicate of commercial bank lenders or any other commercial bank lender(s) selected by
the Company. The facility replaced and cancelled all lending commitments to the Company
under a prior secured credit facility entered into by the Company with the same group of
commercial bank lenders in June 2005. Under the terms of the Facility, the Company has
pledged the capital stock of certain wholly-owned subsidiaries which are all co-borrowers.
The Company may borrow up to $25 million under the Facility in currencies other than the
U.S. Dollar. The Company may elect to pay interest on U.S. Dollar borrowings under the
Facility at a rate of either (1) the London Interbank Offered Rate (LIBOR)
plus 0.625% to 1.375% or (2) a base rate defined as the prime commercial rate less 0.125%
to 1.125%. The Companys actual borrowing costs for LIBOR or base rate borrowings is
determined by reference to a pricing grid based on the Companys ratio of funded debt
to total capitalization. Interest on amounts borrowed under the Facility in currencies
other than the U.S. Dollar will be priced at a rate equal to LIBOR plus 0.625% to 1.375%.
As of December 31, 2006, the weighted average interest rate on Company borrowings
outstanding under the Facility was 5.97%.

The
Facility requires the Company to maintain compliance with certain financial covenants
related to total capitalization, interest expense coverage, tangible net worth, capital
expenditures and operating lease spending. The Company was in compliance with all
covenants as of December 31, 2006.

Borrowings
under the Facility and the previous secured debt facility were $24.7 million at December
31, 2006 versus $51.5 million a year earlier. Available unused borrowings under the
Facility and the previous secured debt facility were $75.1 million at December 31, 2006
versus $73.5 million a year earlier. Available borrowings at December 31, 2006 were
reduced by $25.0 million of commercial paper discussed in Short-term
Borrowings above.

During
the fourth quarter of 2006, the Company began to issue commercial paper through a
placement agent to fund a portion of its short term working capital needs. The Company has
the ability to sell up to $25 million in commercial paper under this arrangement. The
Companys commercial paper program is backed up by the credit commitment of the
Companys revolving credit facility. At December 31, 2006, the Company had $25.0
million of short term commercial paper outstanding.

In
May 2006, the Company entered into a $10 million committed line of credit facility with a
commercial bank lender. Borrowings under this facility bear interest at 1.15% above the
LIBOR for 30 day deposits reset monthly and are secured by a first priority lien on an
assigned pool of retail finance contracts receivable. This facility expires on April 30,
2007. There were no borrowings outstanding under this facility at December 31, 2006.

In
addition, the Company has access to a 2.5 million committed foreign short-term
credit facility. There were no borrowings outstanding under this facility at December 31,
2006 and 1.5 million were outstanding at a weighted average interest rate of 3.92%
at December 31, 2005.

47

---

The
Company believes it has adequate capital resources and borrowing capacity to meet its
projected capital requirements for the foreseeable future. Requirements for working
capital, capital expenditures, pension fund contributions and debt maturities in fiscal
2007 will continue to be funded by operations and the Companys borrowing
arrangements.

Annual
maturities of debt obligations are as follows (in thousands):

|Year  | Maturity Amount
|----- | ---------------
|2007  |                
|2008  |                
|2009  |                
|2010  |                
|2011  |                
|     
|Total |                
|     

Interest
paid on total debt obligations was $3.7 million, $5.5 million and $2.8 million in 2006,
2005 and 2004, respectively.

# Note 9  Accrued
and Other Current Liabilities

Accrued
and other current liabilities were comprised of the following (in thousands):

|2006                           
|-------------------------------
|Accrued salaries and wages     
|Dealer recourse deposits       
|Accrued warranty costs         
|Accrued product liability costs
|Accrued pension obligations    
|Other                          
|                               
|                               
|                               

In
general, the Company provides warranty coverage on equipment for a period of up to twelve
months. The Companys reserve for warranty claims is established based on the best
estimate of the amounts necessary to settle future and existing claims on products sold as
of the balance sheet date. The Company records warranty expense as a component of selling,
general and administrative expense. While the Companys warranty costs have
historically been within its calculated estimates, it is possible that future warranty
costs could differ from those estimates.

The
changes in the carrying amount of the Companys total product warranty liability for
the years ended December 31, 2006 and 2005 were as follows (in thousands):

|2006                                                                        
|----------------------------------------------------------------------------
|Balance beginning of year                                                   
|Accruals for warranties issued during the period                            
|Accruals related to pre-existing warranties (including changes in estimates)
|Settlements made (in cash or in kind) during the period                     
|                                                                            
|Balance end of year                                                         
|                                                                            

48

---

# Note 10  Income
Taxes

The
income tax provision for continuing operations recorded for the years ended December 31,
2006, 2005 and 2004 consisted of the following (in thousands):

|Year Ended December 31, | Federal | State | Foreign  | Total
|----------------------- | ------- | ----- | -------- | -----
|2006                    |         |       | Current  |      
|                        |         |       | Deferred |      
|                       
|                        |         |       | Total    |      
|                       
|2005                    |         |       | Current  |      
|                        |         |       | Deferred |      
|                       
|                        |         |       | Total    |      
|                       
|2004                    |         |       | Current  |      
|                        |         |       | Deferred |      
|                       
|                        |         |       | Total    |      
|                       

Domestic
income from continuing operations before income taxes was $35.7 million, $28.3 million and
$17.4 million for 2006, 2005 and 2004, respectively. Foreign income from continuing
operations before income taxes was $7.1 million, $5.1 million and $3.6 million for 2006,
2005 and 2004, respectively.

A
reconciliation between the reported income tax provision and the federal statutory rate
follows (as a percent of pre-tax income):

|                                                     | 2006
|---------------------------------------------------- | ----
|Federal statutory rate                               |     
|State income taxes, net of Federal income tax effect |     
|Foreign export sale benefit and other tax credits    |     
|Foreign rate differential                            |     
|Finalization of prior year tax returns               |     
|Other, net                                           |     
|                                                    
|                                                     |     
|                                                    

49

---

The
Companys temporary differences and carryforwards which give rise to deferred tax
assets and liabilities consisted of the following (in thousands):

|2006                            
|--------------------------------
|Accrued expenses and reserves   
|Pension benefits                
|Asset valuation reserves        
|Operating loss carryforwards    
|Equity compensation benefits    
|Securitization retained interest
|Tax credit carryforwards        
|Property, plant and equipment   
|Valuation allowance             
|Prepaid expenses                
|Other, net                      
|                                
|Net deferred tax asset          
|                                

The
net deferred tax asset is included in the Consolidated Balance Sheets in the following
captions (in thousands):

|2006                           
|-------------------------------
|Deferred income tax assets     
|Other assets                   
|                               
|Deferred income tax liabilities
|                               
|                               
|                               

At
December 31, 2006, the Company had state net operating loss carryforwards of $15.0 million
and state tax credits of $0.3 million available for the reduction of future income tax
liabilities. Both the state net operating loss carryforwards and state tax credits will
expire at various dates between 2007 and 2026. A valuation allowance has been recorded
against the full amount of these carryforwards and credits for which utilization is
uncertain.

As
of December 31, 2006, U.S. income taxes, net of foreign taxes paid or payable, have not
been provided on the undistributed profits of its foreign subsidiary as all such
undistributed profits are deemed to be permanently reinvested outside of the U.S. Such
unremitted earnings of the subsidiary which have been or are intended to be permanently
reinvested were $11.1 million at December 31, 2006.

Cash
paid related to income taxes during 2006, 2005 and 2004 was $14.8 million, $11.7 million
and $3.8 million, respectively.

# Note 11  Employee
Retirement Plans

The
Company sponsors two qualified defined benefit pension plans for certain of its employees,
an unfunded non-qualified supplemental retirement benefit plan for certain management
employees, as well as other postretirement benefit plans that include health care benefits
and life insurance coverage.

50

---

On
September 29, 2006, the FASB issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans(SFAS No.
158). SFAS 158 requires, among other things, the recognition of the funded status of
each defined pension benefit plan, retiree health care and other postretirement benefit
plans and postemployment benefit plans on the balance sheet. Each over-funded plan is
recognized as an asset and each underfunded plan is recognized as a liability. The initial
impact of the standard due to unrecognized prior service costs or credits and net
actuarial gains or losses as well as subsequent changes in the funded status is recognized
as a component of accumulated comprehensive loss in shareowners equity. Additional
minimum pension liabilities (AML) and related intangible assets are also
derecognized upon adoption of the new standard. SFAS 158 requires initial application for
fiscal years ending after December 15, 2006, with earlier application encouraged. The Company
adopted SFAS 158 as of December 31, 2006. The following table summarizes the effect of
required changes in the AML as of December 31, 2006 prior to the adoption of SFAS 158 as
well as the impact of the initial adoption of SFAS 158 (in thousands):

|Prior to AML
and SFAS 158
Adjustments            | AML 
Adjustment | SFAS 158
Adjustment | Post AML and
SFAS 158
Adjustments
|------------------------------------------------ | --------------- | ------------------- | ---------------------------------
|Other assets                                     |                 |                     | $                                
|Accrued and other current liabilities            |                 |                     |                                  
|Pension and postretirement benefits              |                 |                     |                                  
|Accumulated other comprehensive loss, net of tax |                 |                     |                                  

The
amounts in accumulated other comprehensive loss that are expected to be recognized as
components of net periodic benefit cost (credit) during the next fiscal year are as
follows (in thousands):

|                      | Pension | Postretirement | Postemployment | Total
|--------------------- | ------- | -------------- | -------------- | -----
|Prior service cost    |         |                | $              | 11   
|Transition obligation |         |                |                | --   
|Net loss              |         |                |                | 1,264

The
Company sponsors two qualified defined benefit pension plans for certain of its employees.
The following schedules set forth a reconciliation of the changes in the plans
benefit obligation and fair value of plan assets and a statement of the funded status (in
thousands):

|2006                                          
|----------------------------------------------
|Reconciliation of benefit obligation:         
|Obligation at beginning of year               
|Service cost                                  
|Interest cost                                 
|Actuarial (gain) loss                         
|Benefit payments                              
|                                              
|Obligation at end of year                     
|                                              
|Reconciliation of fair value of plan assets:  
|Fair value of plan assets at beginning of year
|Actual return on plan assets                  
|Employer contributions                        
|Benefit payments                              
|                                              
|Fair value of plan assets at end of year      
|                                              

51

---

|2006                           
|-------------------------------
|Funded Status:                 
|                               
|Funded status at end of year   
|                               
|Unrecognized prior service cost
|Unrecognized loss              
|                               
|Net amount recognized          
|                               

The
following table provides the amounts recognized in the balance sheet (in thousands):

|2006                                            
|------------------------------------------------
|Prepaid benefit cost                            
|Intangible asset                                
|Pension liabilities                             
|Accumulated other comprehensive loss, net of tax
|                                                
|Net amount recognized                           
|                                                

Of
the liability amount, $0.1 million (expected fiscal 2007 funding requirement) is included
in accrued and other current liabilities. The net amount of the non-current portion of the
minimum pension liability is included in pension and other postretirement benefits.

Amounts
recognized within accumulated other comprehensive loss, net of tax, as of December 31,
2006 are shown in the following table (in thousands):

|2006                   
|-----------------------
|Net loss               
|Prior service cost     
|                       
|Total amount recognized
|                       

The
projected benefit obligation, accumulated benefit obligation, and fair value of plan
assets for the plans having accumulated benefit obligations in excess of plan assets were
$51.2 million, $49.1 million and $44.8 million and $52.1 million, $48.9 million and $43.7
million as of December 31, 2006 and 2005, respectively.

The
assumptions used in the measurement of the Companys benefit obligation are shown in
the following table:

|2006                                            
|------------------------------------------------
|Weighted-average assumptions as of September 30:
|Discount rate                                   
|Rate of compensation increase                   
|                                                

52

---

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2006                              
|----------------------------------
|Service cost                      
|Interest cost                     
|Expected return on plan assets    
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit cost         
|                                  

The assumptions
used in the measurement of the Companys net periodic benefit cost for the years
ended December 31, 2006, 2005 and 2004 are shown in the following table:

|2006                                    
|----------------------------------------
|Weighted-average assumptions:           
|Discount rate                           
|Expected long-term return on plan assets
|Rate of compensation increase           
|                                        

The
Companys approach used to determine the expected long-term rate of return on plan
assets assumption is based on weighting historical market index returns for various asset
classes in proportion to the assets held in the Gehl Pension Master Trust
(Trust). Typically, the Trust holds approximately 70% of assets in equity
securities and 30% in fixed income securities. Weighting 10-year compounded trailing
returns on equity and fixed income indices in proportion to the above asset mix yields an
expected long-term return of 9.00%. However, recent unsettled market conditions have
caused management to add a degree of conservatism in the long-term rate of return
assumption, which has been set at 8.75%.

The
following table provides disclosure of the weighted-average asset allocations and future
target allocations as of the respective measurement dates:

|                        
|------------------------
|Asset category:         
|Equity securities       
|Debt securities and cash
|Real estate             
|Other                   
|                        
|                        
|                        

As
manager of plan assets, the Trusts Investment Committee (the Committee)
believes that it must prudently invest pension assets in a manner that attempts to meet
the actuarial long-term rate of return. At the same time, the Committee adheres to three
overriding responsibilities  to safeguard plan assets, to optimize returns, and to
diversify assets. The Committee retains investment specialists as a means to optimize the
total expected portfolio return. Although all day-to-day investment, custodial, and
administrative responsibilities are delegated to the investment specialists, the Committee
maintains an active role in matters relating to asset allocation and general asset
management.

53

---

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                 
|-----------------
|2007             
|2008             
|2009             
|2010             
|2011             
|Years 2012 - 2016
|                 

The
measurement date used for each of the actuarial calculations was September 30.

In
addition, the Company maintains an unfunded non-qualified supplemental retirement benefit
plan for certain management employees. The following schedules set forth a reconciliation
of the changes in the plans benefit obligation and a statement of the funded status
(in thousands):

|2006                                 
|-------------------------------------
|Reconciliation of benefit obligation:
|Obligation at beginning of year      
|Service cost                         
|Interest cost                        
|Actuarial loss                       
|Plan amendments                      
|Benefit payments                     
|                                     
|Obligation at end of year            
|                                     

|Funded Status:                  |  |  |   |        |   |   |        |  
|------------------------------- |  |  | - | ------ | - | - | ------ | -
|                                |  |  |   |       
|Funded status at end of year    |  |  | $ | (9,585 | ) | $ | (6,155 | )
|                                |  |  |   |       
|Unrecognized prior service cost |  |  |   |        |   |   | 431    |  
|Unrecognized loss               |  |  |   |        |   |   | 1,295  |  
|                                |  |  |   |       
|Net amount recognized           |  |  |   |        |   | $ | (4,429 | )
|                                |  |  |   |       

The
following table provides the amounts recognized in the balance sheet (in thousands):

|2006                                            
|------------------------------------------------
|Intangible asset                                
|Accrued benefit liability                       
|Pension liabilities                             
|Accumulated other comprehensive loss, net of tax
|                                                
|Net amount recognized                           
|                                                

54

---

The accrued
benefit liability amount is included in pension and other postretirement benefits. Amounts
recognized within accumulated other comprehensive income (loss), net of tax, as of
December 31, 2006 are shown in the following table (in thousands):

|2006                   
|-----------------------
|Net loss               
|Prior service cost     
|                       
|Total amount recognized
|                       

The
projected benefit obligation, accumulated benefit obligation, and fair value of the plan
assets having accumulated benefit obligations in excess of plan assets were $9.6 million,
$7.7 million and $0, and $6.2 million, $5.7 million and $0 as of December 31, 2006 and
2005, respectively.

The
assumptions used in the measurement of the Companys benefit obligation are as
follows:

|2006                                           
|-----------------------------------------------
|Weighted-average assumptions as of December 31:
|Discount rate                                  
|Rate of compensation increase                  
|                                               

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2006                              
|----------------------------------
|Service cost                      
|Interest cost                     
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit cost         
|                                  

The assumptions
used in the measurement of the Companys net periodic benefit cost for the years
ended December 31, 2006, 2005 and 2004 are shown in the following table:

|2006                                           
|-----------------------------------------------
|Weighted-average assumptions as of December 31:
|Discount rate                                  
|Rate of compensation increase                  
|                                               

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                  | 
|----------------- | 
|2007              | 
|2008              | 
|2009              | 
|2010              | 
|2011              | 
|Years 2012 - 2016 | 
|                 

55

---

The
Company maintains a rabbi trust containing $5.6 million and $5.0 million of assets
designated for the non-qualified supplemental retirement benefit plan as of December 31,
2006 and 2005, respectively. The assets of the rabbi trust are invested in equity
securities and variable life insurance policies.

The
Company maintains a savings and profit sharing plan. The Company matches 50% of each
non-bargaining unit employees contributions to the plan not to exceed 6% of the
employees annual compensation. Vesting of Company contributions occur at the rate of
20% per year and totaled approximately $591,000, $729,000 and $618,000 in 2006, 2005 and
2004, respectively.

The
Company maintains a defined contribution plan that covers certain employees not covered by
a defined benefit plan. The Company contributes various percentages of eligible employee
compensation (as defined in the plan), and the plan does not allow employee contributions.
The Company contributed approximately $558,000, $476,000 and $337,000 in connection with
this plan in 2006, 2005 and 2004, respectively.

The
Company provides post employment benefits to certain retirees in two areas: a $2,500 life
insurance policy for retired office employees and subsidized health insurance benefits for
early retirees prior to their attaining age 65. The number of retirees associated with
post employment benefit costs is approximately 271.

The
following schedules set forth a reconciliation of the changes in the post employment
plans benefit obligation and a statement of the Plans funded status (in
thousands):

|2006                                 
|-------------------------------------
|Reconciliation of benefit obligation:
|Obligation at beginning of year      
|Service cost                         
|Interest cost                        
|Actuarial loss                       
|Benefit payments                     
|                                     
|Obligation  at end of year           
|Funded Status:                       
|                                     
|Funded status at end of year         
|                                     
|Unrecognized transition obligation   
|Unrecognized loss                    
|                                     
|Net amount recognized                
|                                     

The
following table provides the amounts recognized in the balance sheet at December 31, 2006
(in thousands):

|2006                                            
|------------------------------------------------
|Current liability                               
|Long-term liabilitiy                            
|Accumulated other comprehensive loss, net of tax
|                                                
|Net amount recognized                           
|                                                

56

---

Amounts
recognized within accumulated other comprehensive income (loss), net of tax, as of
December 31, 2006 are shown in the following table (in thousands):

|2006                   
|-----------------------
|Net loss               
|Transition obligation  
|                       
|Total amount recognized
|                       

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2006                                 
|-------------------------------------
|Service cost                         
|Interest cost                        
|Amortization of transition obligation
|Amortization of net loss             
|                                     
|Net periodic benefit cost            
|                                     

The discount
rate used in determining the accumulated post employment obligation was 5.85% and 5.75% as
of the measurement dates of December 31, 2006 and 2005, respectively.

The
discount rate used in determining the net periodic benefit cost was 5.75%, 6.00% and 6.25%
for 2006, 2005 and 2004, respectively. The assumed health care cost rate trend used in
measuring the accumulated post employment benefit obligation at December 31, 2006 was 8%
decreasing to 5% over five years and at December 31, 2005 was 9% decreasing to 5% in five
years.

Assumed
health care cost trend rates have a significant effect on the amounts reported for the
health care plans. A 1% change in assumed health care cost trend rates would have the
following effects (in thousands):

|                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------
|Effect on total of service and interest  cost components of net    periodic post employment health care benefit cost
|Effect on the health care component of the accumulated post                                                         
|employment benefit obligation                                                                                       
|                                                                                                                    

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                  | 
|----------------- | 
|2007              | 
|2008              | 
|2009              | 
|2010              | 
|2011              | 
|Years 2012 - 2016 | 
|                 

57

---

# Note 12 
Shareholders Equity

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares by it in the offering, after deducting underwriting discounts,
commissions and expenses. The Company used the net proceeds it received from the offering
to repay debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

On
July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou
BF S.A. (Manitou), the worlds largest manufacturer of telescopic
handlers, the Company issued 1,442,652 shares of common stock to Manitou at an aggregate
purchase price of $19.8 million. The proceeds from the sale of the common stock were used
to repay the Companys outstanding debt.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock. The Company did not repurchase any shares during 2005 or 2004. The Company
repurchased 110,550 shares in the open market under this authorization at a cost of
$729,000 during 2003. As of December 31, 2005, the Company has repurchased an aggregate of
227,850 shares under the authorization. All treasury stock acquired by the Company has
been cancelled and returned to the status of authorized but unissued shares.

On
May 28, 1997, the Board of Directors of the Company adopted a Shareholder Rights Plan and
declared a rights dividend of two-thirds preferred share purchase right
(Right) for each share of common stock outstanding on June 16, 1997, and
provided that two-thirds Right would be issued with each share of common stock thereafter
issued. The Shareholder Rights Plan provides that in the event a person or group acquires
or seeks to acquire 15% or more of the outstanding common stock of the Company, the
Rights, subject to certain limitations, will become exercisable. Each Right, once
exercisable, initially entitles the holder thereof (other than the acquiring person, whose
rights are cancelled) to purchase from the Company one one-hundredth of a share of Series
A preferred stock at an initial exercise price of $55 per one one-hundredth of a share
(subject to adjustment), or, upon the occurrence of certain events, common stock of the
Company or common stock of an acquiring company having a market value
equivalent to two times the exercise price. Subject to certain conditions, the Rights are
redeemable by the Board of Directors for $.01 per Right and are exchangeable for shares of
common stock. The Rights have no voting power and expire on May 28, 2007.

# Note 13  Financial
Instruments

The
Company selectively uses interest rate swaps and foreign currency forward contracts to
reduce market risk associated with changes in interest rates and the value of the U.S
Dollar versus the Euro. The use of derivatives is restricted to those intended for hedging
purposes.

During
the fourth quarter of 2005, the Company entered into a interest rate swap agreement with a
third party financial institution to exchange variable rate interest obligations for fixed
rate obligations without the exchange of the underlying principal amounts. Effective
January 2006, under this agreement, the Companys variable to fixed rate obligations
are an aggregate swapped notional amount of $40 million through January 2008. The
aggregate notional amount of the swap decreases to $30 million effective January 2008, $20
million effective January 2009, $10 million effective January 2010 and expires in January
2011. The Company pays a 4.89% fixed interest rate under the swap agreement and receives a
30 day LIBOR variable rate. The reference 30 day LIBOR rate was 5.322% at December 31,
2006. The variable to fixed interest rate swap is an effective cash-flow hedge. The fair
value of the swap totaled $0.1 million at December 31, 2006 and was recorded on the
Consolidated Balance Sheet, with changes in fair value included in other comprehensive
income (loss).

58

---

During
2005, the Company was party to three interest rate swap agreements (swaps)
that were put in place as hedges protecting against underlying changes in interest rates
and their impact on the gains / losses incurred upon the sale of finance contracts
receivable. Accordingly, the implied gains / losses associated with the fair values of
interest rate swaps would be offset by gains / losses on the sale of the underlying retail
finance contracts. Under the swaps, the Company received interest on a variable LIBOR for
one-month deposits and paid on a fixed rate ranging from of 3.18% to 3.41%. Although the
Company continued to own finance contracts during the term of the swaps, under the
provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, the swaps were deemed ineffective as of April 2, 2005 as the finance
contracts that were owned by the Company at the inception of the swaps had been sold
during the three-month period ended April 2, 2005. As a result, the Company recorded $1.1
million of other income in the three-month period ended April 2, 2005. The Company
terminated the swaps during the three-month period ended July 2, 2005 and recorded $0.7
million of other expense during such period resulting in a realized net gain of $0.4
million.

In
May 2005, the Company entered into a series of forward currency contracts (forward
contracts) to hedge a portion of the Companys exposure to changes in the value
of the U.S Dollar versus the Euro during 2005 as a result of Euro purchase commitments.
All of the forward contracts the Company entered into expired during 2005 resulting in a
realized loss of $0.3 million.

# Note 14  Net
Income Per Share

Basic
net income per common share is computed by dividing net income by the weighted-average
number of common shares outstanding for the period. Diluted net income per common share is
computed by dividing net income by the weighted-average number of common shares and, if
applicable, common stock equivalents which would arise from the exercise of stock options
and vesting of restricted stock. A reconciliation of the shares used in the computation is
as follows (in thousands):

|2006                                  
|--------------------------------------
|Basic shares                          
|Effect of options and restricted stock
|                                      
|Diluted shares                        
|                                      

For
the year ended December 31, 2006, 125,284 options to purchase common shares were
antidilutive and, accordingly, excluded from the effect of options and unvested restricted
stock in the calculation of diluted net income per share.

# Note 15  Leases

The
Company uses certain equipment under operating lease arrangements. Rent expense under such
arrangements amounted to $2,695,000, $2,037,000 and $1,732,000 in 2006, 2005 and 2004,
respectively.

The
Company maintains non-cancelable operating leases for certain equipment. Future minimum
lease payments under such leases at December 31, 2006 are as follows (in thousands):

|           | 
|---------- | 
|2007       | 
|2008       | 
|2009       | 
|2010       | 
|2011       | 
|Thereafter | 
|          
|Total      | 
|          

59

---

# Note 16 
Contingencies

The
Company is involved in litigation of which the ultimate outcome and liability to the
Company, if any, is not presently determinable. Management believes that final disposition
of such litigation will not have a material impact on the Companys results of
operations or financial position.

# Note 17  Segment
Information

SFAS
No. 131, Disclosures about Segments of an Enterprise and Related Information,
establishes the standards for reporting information about operating segments in financial
statements.  Historically the Company had two operating and reportable segments,
construction equipment and agricultural equipment.  The products in the historical
agricultural equipment segment included material handling equipment (skid loaders,
telescopic handlers, compact excavators, compact track loaders and all-wheel-loaders) and
agricultural implement products for haymaking, forage harvesting, feedmaking and manure
handling.  In the first quarter of 2006, the Company re-evaluated its operating and
reportable segments in connection with the discontinuation of the manufacturing and
distribution of its agricultural implement business and determined that it now has only
one operating and reportable segment.  Sales of material handling equipment that were
previously included in the agricultural equipment segment and sales that were previously
included in the construction equipment segment are now combined for both internal and
external reporting purposes.

60

---

# Note 18  Quarterly
Financial Data (unaudited)

|In Thousands, Except Per Share Data -              | First
Quarter | Second
Quarter | Third
Quarter | Fourth
Quarter
|-------------------------------------------------- | ------------- | -------------- | ------------- | --------------
|2006                                               |               |                |               |               
|Net sales                                          |               |                | $             | 122,123       
|Gross profit                                       |               |                |               | 26,252        
|Income from continuing operations                  |               |                |               | 6,386         
|(Loss) gain from discontinued operations           |               |                |               | (116          
|(Loss) gain on disposal of discontinued operations |               |                |               | (8,927        
|Net (loss) income                                  |               |                |               | (2,657        
|Diluted net (loss) income per common share:        |               |               
|Continuing operations                              |               |                |               | 0.51          
|Discontinued operations                            |               |                |               | (0.73         
|                                                   |               |                |               |               
|Total diluted net (loss) income per common share   |               |                |               | (0.21         
|Basic net (loss) income per common share:          |               |               
|Continuing operations                              |               |                |               | 0.53          
|Discontinued operations                            |               |                |               | (0.76         
|                                                   |               |                |               |               
|Total basic net (loss) income per common share     |               |                |               | (0.22         
|                                                   |               |                |               |               
|2005                                               |               |                |               |               
|Net sales                                          |               |                | $             | 108,881       
|Gross profit                                       |               |                |               | 23,043        
|Income from continuing operations                  |               |                |               | 4,913         
|Gain (loss) from discontinued operations           |               |                |               | 11            
|Net income                                         |               |                |               | 4,924         
|Diluted net income (loss) per common share:        |               |               
|Continuing operations                              |               |                |               | 0.47          
|Discontinued operations                            |               |                |               | --            
|                                                   |               |                |               |               
|Total diluted net income per common share          |               |                |               | 0.47          
|Basic net income (loss) per common share:          |               |               
|Continuing operations                              |               |                |               | 0.49          
|Discontinued operations                            |               |                |               | --            
|                                                   |               |                |               |               
|Total basic net income per common share            |               |                |               | 0.49          
|                                                   |               |                |               |               

61

---

# GEHL COMPANY AND
SUBSIDIARIES

# SCHEDULE II VALUATION
AND QUALIFYING ACCOUNTS(in thousands)

|Period            | Description | Balance at
Beginningof Year | Charged to
Costs andExpenses | Deductions | Balance atEnd of Year
|----------------- | ----------- | --------------------------- | ---------------------------- | ---------- | ---------------------
|Year Ended        |             |                             |                              |            |                      
|December 31, 2004 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and                  |            |                      
|                  |             |                             | Dealer                       |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      
|Year Ended        |             |                            
|December 31, 2005 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and                  |            |                      
|                  |             |                             | Dealer                       |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      
|Year Ended        |             |                            
|December 31, 2006 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and                  |            |                      
|                  |             |                             | Dealer                       |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      

62

---

# Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure

There
have been no changes in or disagreements with the Companys accountants regarding
accounting and financial disclosure required to be reported pursuant to this item.

# Item 9A. Controls and
Procedures

# Disclosure Controls and
Procedures

The
Companys management, with the participation of the Companys principal
executive officer and principal financial officer, has evaluated the Companys
disclosure controls and procedures as of December 31, 2006. Based upon that evaluation,
the Companys principal executive officer and principal financial officer have
concluded that the Companys disclosure controls and procedures were effective as of
December 31, 2006.

# Managements Annual
Report on Internal Control Over Financial Reporting

The
report of management required under this Item 9A is contained in Item 8 of this Annual
Report on Form 10-K under the caption Managements Annual Report on Internal
Control Over Financial Reporting.

# Report of Independent
Registered Public Accounting Firm

The
report under this Item 9A is contained in Item 8 of this Annual Report on Form 10-K under
the caption Report of Independent Registered Public Accounting Firm.

# Changes in Internal
Control Over Financial Reporting

There
was no change in the Companys internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the quarter ended December 31, 2006 that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial reporting.

# Item 9B. Other
Information

The
Company has no other information to report pursuant to Item 9B.

# PART III

# Item 10. Directors and
Executive Officers of the Registrant

Pursuant
to Instruction G, the information required by this item with respect to directors is
hereby incorporated herein by reference from the captions entitled Election of
Directors and Board of Directors set forth in the Companys
definitive Proxy Statement for its 2007 Annual Meeting of Shareholders (Proxy
Statement)(1). Information with respect to executive officers of the
Company appears at the end of Part I, on Page 12 and 13, of this Form 10-K. Pursuant to
Instruction G, the information required by this item with respect to compliance with
Section 16(a) of the Securities Exchange Act of 1934 is hereby incorporated by reference
from the caption entitled Other Matters  Section 16(a) Beneficial Ownership
Reporting Compliance set forth in the Proxy Statement.

The
Company has adopted a Code of Business Conduct and Ethics that applies to all of the
Companys employees, including the Companys Chief Executive Officer and Chief
Financial Officer. The Company has posted a copy of the Code of Business Conduct and
Ethics on its website at www.gehl.com. The Company intends to satisfy the
disclosure requirements under Item 10 of Form 8-K regarding amendments to, or waivers
from, the Code of Business Conduct and Ethics by posting such information on its website
at www.gehl.com. The Company is not including the information contained on its
website as part of, or incorporating it by reference into, this report.

63

---

# Item 11. Executive
Compensation

Pursuant
to Instruction G, the information required by this item is hereby incorporated herein by
reference from the captions entitled Director Compensation and Summary
Compensation Table set forth in the Proxy Statement.

# Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Pursuant
to Instruction G, the information required by this item with respect to security ownership
of certain beneficial owners and management is hereby incorporated by reference herein
from the caption Principal Shareholders set forth in the Proxy Statement.

The
following table sets forth information with respect to compensation plans under which
equity securities of the Company are authorized for issuance.

|                         
|-------------------------
|Plan category            
|Equity compensation plans
|approved by security     
|holders                  
|                         
|Equity compensation plans
|not approved by security 
|holders                  
|                         
|Total                    
|                         

| | (1) | Represents
options to purchase the Companys Common Stock granted under the
               Companys 2004 Equity Incentive Plan, 2000 Equity Incentive Plan and
1995                Stock Option Plan, each of which was approved by the Companys
               shareholders.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
up to 200,000 shares of restricted Common Stock that can be issued                under
the Companys 2004 Equity Incentive Plan. These shares are subject to
               a minimum three year vesting period.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 13. Certain
Relationships and Related Transactions

Pursuant
to Instruction G, the information required by this item is hereby incorporated herein by
reference from the caption entitled Other Matters  Certain Transactions
set forth in the Proxy Statement.

# Item 14. Principal
Accountant Fees and Services

The
information required by this item is hereby incorporated by reference from the captions
entitled Audit Committee Report and Approval of Selection of the
Independent Registered Public Accounting Firm set forth in the Proxy Statement.

---

|1 | The
Proxy Statement will be filed with the Commission pursuant to Regulation 14A.
|- | ---------------------------------------------------------------------------------

64

---

# PART IV

# Item 15. Exhibits and
Financial Statement Schedules

| | (a) | 1
and 2. Financial statements and financial statement schedule.
| | --- | ---------------------------------------------------------------

| | Reference
is made to the separate index to the Companys consolidated financial statements and
schedule contained in Part II, Item 8 of this Form 10-K.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.
Exhibits.
| | ------------

| | Reference
is made to the separate exhibit index contained on Pages 66 through 69 hereof.
| | ----------------------------------------------------------------------------------------

# SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                     |                                   
|-------------------- | ----------------------------------
|                     | GEHL COMPANY                      
|Date:  March 2, 2007 | By  /s/ William D. Gehl           
|                     | William D. Gehl,                  
|                     | Chairman of the Board of Directors
|                     | and Chief Executive Officer       

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

|Signature               | Title                                        | Date         
|----------------------- | -------------------------------------------- | -------------
|/s/ William D. Gehl     | Chairman of the Board of Directors,          | March 2, 2007
|William D. Gehl         | Chief Executive Officer and Director        
|                        | (Principal Executive Officer)               
|/s/ Thomas M. Rettler   | Vice President and Chief Financial Officer   | March 2, 2007
|Thomas M. Rettler       | (Principal Financial and Accounting Officer)
|/s/ Thomas J. Boldt     | Director                                     | March 2, 2007
|Thomas J. Boldt        
|/s/ Marcel-Claude Braud | Director                                     | March 2, 2007
|Marcel-Claude Braud    
|/s/ John T. Byrnes      | Director                                     | March 2, 2007
|John T. Byrnes         
|/s/ Richard J. Fotsch   | Director                                     | March 2, 2007
|Richard J. Fotsch      
|/s/ Bruce D. Hertzke    | Director                                     | March 2, 2007
|Bruce D. Hertzke       
|/s/ John W. Splude      | Director                                     | March 2, 2007
|John W. Splude         
|/s/ Dr. Hermann Viets   | Director                                     | March 2, 2007
|Dr. Hermann Viets      

65

---

# GEHL COMPANY
INDEX TO EXHIBITS

|Exhibit Number | Document
Description
|-------------- | --------------------

|(3.1) | Restated
Articles of Incorporation, as amended, of Gehl Company [Incorporated by
               reference to Exhibit 3.2 to the Companys Quarterly Report on Form
10-Q for                the quarter ended June 28, 1997]
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3.8) | By-Laws
of Gehl Company, as amended through October 27, 2006 [Incorporated
               byreference to Exhibit 3.2 to the Companys Current Report on Form
8-K                filed on October 31, 2006]
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.9) | Rights
Agreement, dated as of May 28, 1997, between Gehl Company and U.S. Bank
               National Association (as successor to Firstar Trust Company) [Incorporated
by                reference to Exhibit 4.1 to the Companys Registration Statement
on Form                8-A, dated as of May 28, 1997]
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.10) | Amendment
to Rights Agreement, dated as of September 20, 2002 by and among U.S.                Bank
National Association, Gehl Company and American Stock Transfer and Trust
               Company [Incorporated by reference to Exhibit 4.1 of the Companys
               Quarterly Report on Form 10-Q for the quarter ended September 28, 2002]
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.11) | Shareholder
Agreement, dated July 22, 2004 by and between Gehl Company and                Manitou BF
S.A. [Incorporated by reference to Exhibit 10.7 of the Companys
               Quarterly Report on Form 10-Q for the quarter ended June 26, 2004]
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.1)* | Supplemental
Retirement Benefit Agreement by and between William D. Gehl and Gehl Company
[Incorporated by reference to Exhibit 10.4 of the Companys Annual Report on Form
10-K for the year ended December 31, 1995]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.2)* | Amendment
to Supplemental Retirement Benefit Agreement by and between William D. Gehl and Gehl
Company dated as of April 20, 2000 [Incorporated by reference to Exhibit 10.6 of the
Companys Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.3)* | Form
of Supplemental  Retirement Benefit Agreement between Gehl Company and Messrs.  Keyes,
Miller,  Monnat, Moore and Mulcahy                            [Incorporated  by
 reference  to  Exhibit  10.7 to the  Companys  Quarterly  Report on Form 10-Q for the
                           quarter ended July 1, 2000]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.4)* | Supplemental
 Retirement  Benefit  Agreement by and between  Gehl  Company and Thomas M.  Rettler
 dated as of August 23, 2004                            [Incorporated  by  reference  to
 Exhibit  10.3 of the  Companys  Quarterly  Report on Form 10-Q for the
                           quarter ended September 25, 2004]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.5)* | Supplemental
Retirement Benefit Agreements, as amended [Incorporated by reference to Item 5.02 of the
Companys Current Report on Form 8-K filed on December 19, 2006]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.6)* | Employment
Agreement by and between Gehl Company and William D. Gehl dated as of June 14, 2004
(executed as of July 30, 2004) [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended September 25, 2004]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.7)* | Gehl
Savings Plan, as amended and restated effective July 1, 2001 [Incorporated by reference
to Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended
September 29, 2001]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.8)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended March 30, 2002]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

66

---

|(10.9)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended June 29, 2002]
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.10)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended September 27, 2003]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.11)* | Gehl
Company Retirement Income Plan B, as amended and restated [Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the
quarter ended September 29, 2001]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.12)* | Amendments
to Gehl Company Retirement Income Plan B [Incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q for the quarter ended
June 29, 2002]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.13)* | Amendment to Gehl
Company Retirement Income Plan B,  dated December 15, 2006
|-------- | ------------------------------------------------------------------------------

|(10.15)* | Gehl
Company 1995 Stock Option Plan, as amended [Incorporated by reference to Exhibit 10.1 to
the Companys Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.16)* | Form
of Stock Option Agreement for executive officers used in conjunction with the Gehl
Company 1995 Stock Option Plan [Incorporated by reference to Exhibit 10.12 of the Companys
Annual Report on Form 10-K for the year ended December 31, 1995]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.17)* | Form
of Stock Option Agreement for non-employee directors used in conjunction with the Gehl
Company 1995 Stock Option Plan [Incorporated by reference to Exhibit 10.13 of the Companys
Annual Report on Form 10-K for the year ended December 31, 1995]
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.18)* | Gehl
Company 2000 Equity  Incentive Plan  [Incorporated  by reference to Appendix A to the
Companys  Proxy  Statement for the                            2000 Annual Meeting of
Shareholders]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.19)* | Form
of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2000
Equity Incentive Plan [Incorporated by reference to Exhibit 4.5 to the Companys
Registration Statement on Form S-8 (Registration No. 333-36102)]
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.20)* | Form
of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl
Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.6 to the
Companys Registration Statement on Form S-8 (Registration No. 333-36102)]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.21)* | Form
of Change in Control and Severance Agreement between Gehl Company and Messrs.  Keyes,
Moore and Mulcahy  [Incorporated by                            reference to Exhibit 10.8
of the  Companys  Quarterly  Report on Form 10-Q for the quarter ended July 1,
                           2000]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.22)* | Forms
of Amendment to the Change in Control and Severance Agreement between Gehl Company and
Messrs. Keyes, Moore and Mulcahy dated as of June 13, 2001 [Incorporated by reference to
Exhibits 10.3 and 10.4 of the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.23)* | Change
in Control and  Severance  Agreement  between Gehl Company and Kenneth H. Feucht dated as
of May 1, 2004  [Incorporated                            by reference to Exhibit 10.8 of
the  Companys  Quarterly  Report on Form 10-Q for the quarter ended July
                           1, 2000]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.24)* | Amendment
to the Change in Control and Severance Agreement between Gehl Company and Kenneth H.
Feucht dated May 1, 2004 [Incorporated by reference to Exhibit 10.3 and 10.4 of the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2001]
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

67

---

|(10.25)* | Change
in Control and Severance Agreement by and between Gehl Company and Thomas M. Rettler
dated as of August 23, 2004 [Incorporated by reference to Exhibit 10.2 of the Companys
Quarterly Report on Form 10-Q for the quarter ended September 25, 2004]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.26)* | Change
in Control and Severance Agreement between Gehl Company and James J. Monnat executed as
of July 22, 2005. [Incorporated by reference to Exhibit 10.37 of the Companys
Annual Report on Form 10-K for the year ended December 31, 2005.]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.27)* | Gehl
Company Deferred Compensation Plan effective August 1, 2000 [Incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.28)* | Gehl
Company 2004 Incentive Compensation Plan [Incorporated by reference to Exhibit 10.1 of
the Companys Quarterly Report on Form 10-Q for the quarter ended March 27, 2004]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.29)* | Change
in Control  and  Severance  Agreement  between  Gehl  Company and Daniel L. Miller
 executed as of December  16,  2005. [Incorporated by reference to Exhibit 10.38 of the
Companys Annual Report on Form 10-K for the year ended December 31, 2005.
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.30)* | Form
of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2004
Equity Incentive Plan [Incorporated by reference to Exhibit 10.2 of the Companys
Quarterly Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.31)* | Form
of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl
Company 2004 Equity Incentive Plan [Incorporated by reference to Exhibit 10.3 of the
Companys Quarterly Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.32)* | Form
of Election Relating to Withholding Taxes In Connection With the Exercise of a
Non-Qualified Stock Option used in conjunction with the Gehl Company 2004 Equity
Incentive Plan [Incorporated by reference to Exhibit 10.4 of the Companys Quarterly
Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.33) | Form
of Restricted Stock Agreement used in conjunction with the Gehl Company           2004
                Equity Incentive Plan [Incorporated by reference to Exhibit 10.4 of the
                             Companys        Quarterly
                                Report on Form 10-Q for the quarter ended September 25,
                   2004]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.34)* | Directors
Compensation schedule effective January 1, 2005 [Incorporated by reference to the Companys
Current Report on Form 8-K filed on March 2, 2005]
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.35)* | Gehl
Company 2004 Equity Incentive Plan, as amended [Incorporated by reference to Appendix A
to the Companys Proxy Statement for the 2006 Annual Meeting of Shareholders and by
reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed on April
26, 2006]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.36) | Receivables
Sale Agreement, dated March 15, 2006, between Gehl Company and Gehl  Receivables II, LLC
[Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form
8-K filed on March 21, 2006]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.37) | Receivables
Purchase and Sale Agreement, dated March 15, 2006, between Gehl
               Receivables II, LLC and Gehl Funding II, LLC [Incorporated by reference to
               Exhibit 10.2 to the Companys Current Report on Form 8-K filed on
March 21,                2006]
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.38) | Receivables
Purchase Agreement, dated March 15, 2006, between Gehl Company, Gehl
               Funding II, LLC, Park Avenue Receivables Company, LLC and JP Morgan Chase
Bank,                N.A. [Incorporated by reference to Exhibit 10.3 to the Companys
Current                Report on Form 8-K filed on March 21, 2006]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

68

---

|(10.39) | Receivables
Sale and Assignment Agreement, dated March 15, 2006, between Gehl                Funding
LLC and Gehl Funding II, LLC [Incorporated by reference to Exhibit 10.4                to
the Companys Current Report on Form 8-K filed on March 21, 2006]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.40) | Performance
Undertaking, dated March 15, 2006, between Gehl Company and Gehl                Funding
II, LLC [Incorporated by reference to Exhibit 10.5 to the Companys
               Current Report on Form 8-K filed on March 21, 2006]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.41) | Credit
Agreement, dated October 17, 2006, among Gehl Company, Compact Equipment
               Attachments, Inc., Gehl Power Products, Inc., Mustang Manufacturing
Company,                Inc., the lenders named therein and Bank of Montreal, as
administrative agent                [Incorporated by reference to Exhibit 10.1 to the
Companys Current Report                on Form 8-K filed on October 23, 2006]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.42)* | Amendment
to Gehl Savings Plan, dated December 15, 2006
|-------- | -------------------------------------------------------

|(21) | Subsidiaries
of Gehl Company
|---- | ----------------------------

|(23) | Consent
of PricewaterhouseCoopers LLP
|---- | -------------------------------------

|(31.1) | Certification
of the Chief Executive Officer pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002
|------ | ---------------------------------------------------------------------------------------------------------------------

|(31.2) | Certification
of the Chief Financial Officer pursuant to Section 302 of the                Sarbanes
Oxley Act of 2002
|------ | ---------------------------------------------------------------------------------------------------------------------

|(32.1) | Certification
of Periodic Financial Report by the Chief Executive Officer and                Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
               2002
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(99) | Proxy
Statement for 2007 Annual Meeting of Shareholders (To be filed with the
               Securities and Exchange Commission under Regulation 14A; except to the
extent                incorporated by reference, the Proxy Statement for the 2007 Annual
Meeting of                Shareholders shall not be deemed to be filed with the
Securities and Exchange                Commission as part of this Annual Report on Form
10-K)
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* A management contract or
compensatory plan or arrangement.

Except as otherwise noted, all
documents incorporated by reference are to Commission File No. 0-18110.

69